Lithium miner Pilbara Minerals has introduced a new strategic investor as part of a A$91.5-million equity raise.
The ASX-listed miner has raised A$55-million through a strategic placement to China’s largest electric vehicle battery manufacturer, Contemporary Amperex Technology (CATL), which has taken an 8.5% interest in the lithium miner.
Pilbara has also undertaken an institutional share placement to raise an additional A$36.5-million.
The placement will comprise the issue of 305.1-million new shares in Pilbara, priced at 30c each.
The CATL placement will be settled in two tranches, with the first raising A$20-million and being conducted under Pilbara’s existing placement capacity. The second tranche to raise A$35-million will be subject to shareholder approval.
Under the share subscription agreement, CATL has agreed to provide Pilbara with a A$5-million deposit, to demonstrate its commitment to the placement.
As part of the relationship, CATL has indicated its willingness to provide Pilbara with commercial support by purchasing spodumene concentrate which could become available under its existing offtake agreements, or otherwise, subject to mutual commercial agreement and the parties entering into an offtake agreement.
The two companies have also recognised that Pilbara could benefit from CATL’s technical and strategic expertise and financial capacity to broaden the company’s exposure to a wider range of investors, financiers and other commercial partners.
Meanwhile, following the completion of the institutional placement, Pilbara will conduct a share purchase plan (SPP), which is expected to raise an additional A$20-million from eligible shareholders. Eligible shareholders can subscribe for up to A$30 000 in new shares.
“While there has been commentary talking down the current state of lithium markets, it has belied the significant interest we have continued to see from the strategic players in the lithium-ion supply chain and their focus on lithium raw material supply,” Pilbara MD Ken Brinsden said on Wednesday.
“In particular, the focus is on the quality and security of the lithium raw material supply and matching the raw material demand growth to growth downstream in the lithium-ion battery supply chain.
“These factors have continued to influence our thoughts on the company’s future growth and funding mechanisms,” Brinsden said.
The funds raised will go towards strengthening Pilbara’s balance sheet and will bolster its working capital to support the continued ramp-up of the Pilgangoora project, in Western Australia.
The funds will also be used to fund Pilbara’s initial 21% equity interest in the proposed downstream joint venture with major POSCO, involving a primary lithium hydroxide downstream chemical processing plant in South Korea.
The funding will also go towards process plant works at the Stage 1 project at Pilgangoora, and to fund studies for the revised Stag 2 expansion.
