The capital will also be used to advance its strategy to become a second-generation lithium raw materials producer.
The capital raising is being undertaken by way of a $4.53 million, 1-for-5 non-renounceable pro-rata rights issue(“Rights Issue”) and a share placement to professional and institutional investors(“Placement”)to raise up to $3.35 million (together, the “Capital Raising”).
The Capital Raising will be undertaken at an issue price of $0.02 per share.
The Company has received firm commitments in relation to the Placement and has also received sub-underwriting commitments and firm commitments from major shareholders to take up their entitlements under the Rights Issue. It is intended that the Rights Issue will be fully underwritten subject to finalising an underwriting agreement with joint lead managers Taylor Collison and Bridge Street Capital Partners. The underwriting agreement is expected to be signed prior to the lodgement of the Rights Issue prospectus being 18 February 2019.
Liontown’s Chairman, Tim Goyder, who has a relevant interest in 19.95% of the Company’s shares, has confirmed his intention to take up his entitlement in the Rights Issue in the amount of $893,940. All other directors have committed to take up all their entitlements. In addition, Liontown Directors will subscribe for an additional $350,000 of shares in the raising, subject to shareholder approval.
The issue price of $0.02 per share represents a discount of 20% to the last closing price of LTR shares on Monday, 11 February 2019, being $0.025.
Liontown Managing Director, David Richards said:“The response to the capital raising from both new professional investors and our major shareholders has been extremely encouraging, with the demand for the placement well exceeding funds sought to be raised. I believe this is testament to the quality and potential of our assets at Kathleen Valley and Buldania, which are located in established, well-servicedmining provinces in Western Australia.
“This funding will enable us to rapidly advance project development activities at Kathleen Valley following the recent completion of an independent Scoping Study which confirmed the potential to establish a commercially robust mining operation. Resource expansion drilling is already in progress and we are confident that we can significantly extend the mine life from the current ~9 years outlined in the study. Important metallurgical test work is also ongoing to optimise grade and recoveries as a prelude to further feasibility studies this year.
“At Buldania, we look forward to further definition drilling at the Anna Prospect as a precursor to a maiden Mineral Resource estimate. We will also test a number of newly discovered spodumene-bearing pegmatites which are located approximately 5km north-west of Anna.
“2019 will be an exciting and busy year for Liontown where shareholders can expect strong news flow as we work both to unlock value and de-risk our assets – positioning the Company to be a significant new supplier of lithium raw materials to the rapidly expanding lithium-ion battery industry.”
