Anson’s big $50m placement to take Paradox all the way to FID

Investors have highlighted their strong support for Anson’s plans to develop its Paradox lithium project into a battery grade lithium carbonate supplier by backing a $50m placement.

Proceeds from the placement of about 139 million shares priced at 36c each – a 11.1% discount to the five-day volume weighted average price – ensures that the company is fully funded for rapid development of the project to a Final Investment Decision.

This follows on Anson Resources (ASX:ASN) defining a major resource upgrade, reaching a binding memorandum of understanding with proven direct lithium extraction player Sunresin, and a Definitive Feasibility Study all in the past month – all of which highlights the rapid progress it has been making.

“The result of the capital raise is an outstanding endorsement of the Paradox Lithium Project and for ‘made in USA’ battery grade lithium carbonate,” executive chairman Bruce Richardson said.

“We were delighted to price the Placement at a tight discount to the prevailing VWAPs, despite immediately following a significant market downward correction.

“Interest in the Placement far exceeded Anson’s requirements, with Anson upsizing to $50 million to facilitate access to the register for quality investors.

“The post placement register provides a strong shareholder base upon which to progress the next phase of the Project’s development.”

Rapid development

Proceeds from the placement will be used to complete front-end engineering design work, permitting and ordering of long lead procurement items to accelerate Paradox to FID, anticipated in the second quarter of 2023.

Funds will also be used for further resource expansion including the execution of the company’s Western Strategy, which will be included in a future resource upgrade at Paradox.

Anson increased resources by 324% in August to 788,300t of lithium carbonate equivalent following the success of the Long Canyon No.2 well and has flagged further growth after the recent Cane Creek 32-1 well intersected lithium in Clastic Zones that were not included in the resource upgrade.

The DFS has outlined attractive economics for a project that will initially produce 13,074 tonnes per annum for an initial 10 years of project life, and then continuing producing at lower commercial levels, if no further extraction wells were to come on-line, up to a production life of 23 years.

Phase 1 revenues are expected to be around US$5,080m mark, and the project has a compelling phase 1 pre-tax NPV and IRR of US$1,306 million and 47% respectively, and post-commissioning payback period of two years.

Capex is estimated at US$495m with the lithium carbonate plant to use Sunresin patented, proven Direct Lithium Extraction (DLE) technology.

First production is currently targeted for 2025.

This article was developed in collaboration with Anson Resources, 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.