Market darling Argosy Minerals has scrapped a $16.9 million investment from one of China’s fastest-growing battery companies to take advantage of strong investor interest.

The Perth-based lithium play (ASX:AGY) — which has enjoyed a share price hike of almost 1600 per cent since February — swapped a 19.9 per cent placement with Qingdao Qianyuan High-tech New Material Co for a $15 million placement and $2 million share purchase plan.

The placement, to institutional and sophisticated investors, was heavily oversubscribed.

Strong investor interest spurred Argosy to undertake the placement, which was on better terms than the Qianyun deal and avoided time-consuming Chinese regulatory approvals, Argosy managing director Jerko Zuvela told investors.

The terms include a 159 per cent premium in issue price to the Qianyun placement (a 22c issue price compared to 8.5c per share under Qianyun’s placement).

This meant funds would be raised with substantially less dilution to existing shareholders.

The proposal also avoided a major shareholder putting its foot on a potential 19.9 per cent “blocking stake”.

Previously announced sales agreements with Qianyun will remain in place, subject to due diligence.

The deal, if finalised, will see a $9.55 million upfront payment over a quantity of battery-grade lithium during first-year of production at the company’s flagship Rincon lithium project in Argentina.

Argosy expects it will have sufficient funds to complete Stage 2 development at Rincon.

Mr Zuvela said it had received in-principle agreement from its joint venture partners to accelerate the company’s move to 77.5 per cent ownership at Rincon.

The company is on-track for first battery grade lithium product from Rincon in the March 2018 quarter.

Since the start of the year, Argosy has been one of the standout performers on the ASX this year soaring 1590 percent from a 52-week low of 2.1c in February to a 52-week high of 35.5c today.

Shares fell 9 per cent to 28c in Thursday afternoon trade.

Argosy has a market cap of around $223 million.