Explorer and developer Galan Lithium (ASX: GLN) has received firm commitments to raise $31.5 million through an over-subscribed placement to institutional, sophisticated and professional investors.
The company has agreed to issue 30 million new and fully-paid ordinary shares at $1.05 each, representing a 12.5% discount to the last closing price of $1.20 on 17 May and a 9.8% discount to the 10 day volume weighted average price of $1.16.
The placement provides Galan with considerable flexibility with respect to ongoing capital expenditure requirements at the Hombre Muerto West and Candelas lithium brine projects in Argentina and the Greenbushes South lithium project in Western Australia.
Proceeds will be used to purchase long-lead items in preparation for a lithium carbonate equivalent processing plant and a Stage 2 definitive feasibility study at Hombre Muerto West.
The money will also be used for additional work at Greenbushes South including exploration and production well drilling; the funding of a workers’ camp extension and production expansion studies; as well as general working capital.
Canaccord Genuity (Australia) acted as sole lead manager and bookrunner to the placement.
Share purchase plan
Galan also intends to undertake a non-underwritten share purchase plan to eligible existing shareholders to raise an additional $5 million.
Shareholders will be offered the opportunity to subscribe for up to $30,000 of shares at the same issue price as the placement.
Exciting time
Managing director Juan Pablo Vargas de la Vega said the capital raising signalled an “exciting time” for the company.
“This is an exciting time to be involved in the Galan story,” he said.
“I wish to thank all the placement participants, old and new, who have strongly supported the Galan production plan which will take us from an initial smaller-scale lithium producer to a 60,000 tonnes per annum player.”
He said the raisings would keep the company well-funded with a pro-forma cash position of approximately $50 million on completion.
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