$50m placement leaves Galan cashed-up for lithium development
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Galan is now well funded to accelerate development of its strategic lithium projects after raising $50m through a two-tranche institutional placement.
Firm commitments were received for the placement priced at $1.15 per share – a 1% discount to the 15-day volume weighted average price – with the first tranche of $29.8m worth of shares being well supported by high-quality domestic and offshore institutions.
The second $20.2m tranche was subscribed for by two institutional investors with a track record of successful investment in the natural resources sector and is subject to approval by Galan Lithium’s (ASX:GLN) shareholders.
Upon settlement of both tranches, the company will have about $65.1m in cash (before costs.
“We are delighted to announce the completion of the placement which has enabled us to introduce a number of high-quality institutions to Galan’s register,” managing director Juan Pablo Vargas de la Vega said.
“This represents a significant milestone in the history of the company and the recognition from these leading investors provides significant external validation for Galan’s extensive portfolio of strategic lithium projects.
“I would like to thank all new and existing shareholders for their ongoing support and look forward to accelerating the development of Galan’s projects at a particularly exciting time for the industry.”
Proceeds from the placement will be used to accelerate drilling activities at the company’s flagship Hombre Muerto West lithium brine project for production and convert existing resources to reserves.
The project currently hosts a resource of 2.3 million tonnes of lithium carbonate equivalent with potential for more after the company expanded its footprint in mid-July.
Funds will also be used for drilling at Candelas to convert existing resources – currently estimated at about 685,000t LCE – to reserves.
Galan reported late last month that it would soon begin the scoping study for the project, which, like HMW, is capable of producing a brine concentrate with up to 6% lithium with low impurities.
Additionally, the proceeds will be used for ongoing exploration activities at HMW, Candelas and Greenbushes South, along with completion of feasibility studies at HMW and Candelas.
This article was developed in collaboration with Galan Lithium, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.