A Northern Territory lithium project will likely break ground this year after a big capital raise
A lithium project in the Northern Territory is fully funded after a capital raise and an equity investment from an offtake customer.
Core Lithium expects to make a final investment decision on its Finniss lithium project near Darwin before the end of the year after raising up to $140m and locking in a major offtake agreement.
The company has now secured customers to take about 80 per cent of the production from stage one of the Finniss project, which managing director Stephen Biggins said was expected to start producing late next year.
On Monday the Adelaide-based company announced an underwritten $91m placement, a $15m share purchase plan for existing shareholders, and a $34m equity investment from China’s Ganfeng Lithium.
Shenzhen-listed Ganfeng has also agreed to buy 75,000 tonnes per year of concentrate from the Finniss project over four years.
Coupled with an earlier agreement with Tesla-supplier Sichuan Yahua Industrial Group, this means that about 80 per cent of the stage one production is spoken for.
The capital raising was priced at 31c while the Ganfeng investment was at 33.8c. The company’s shares last traded at 36c.
Mr Biggins said the investments were “transformational” for the company, and Ganfeng was “one of the largest, if not the largest lithium producer globally’’.
“We’ve also got a fully underwritten placement by Bank of America and Canaccord for $91m which will is provide finance for the project to be fully funded.
“The company will be looking to complete the final investment decision in coming weeks and is in a position to start construction of the project before the end of this calendar year.
“With Core releasing its feasibility and scoping studies two weeks ago the market is realising that it’s shovel ready and we’ll be the next Australian lithium project to market.
“And particularly in the context of lithium concentrate selling at above $US1000 per tonne in recent weeks, Core’s timing to build the project is ideal.’’
The $89m Finniss project is just 88km from the Darwin port and has a five year mine life producing up to 197,000 tonnes of concentrate per year.
A stage two expansion could extend the mine life to 10 years, with drilling to underpin that project under way.
The company also received a $6m Modern Manufacturing Initiative grant from the federal government in July to assess the viability of building a lithium hydroxide plant in Darwin.