Arizona Lithium eyes $2m raise for Prairie direct extraction

Arizona Lithium’s $2m raising for ordinary shareholders ahead of incoming milestones
All directors and most large holders intend on taking up full $30k entitlement
Construction set to soon begin for first phase production

Special Report: Arizona Lithium is launching a $2m share purchase plan (SPP) to advance its Prairie lithium project in the Canadian province of Saskatchewan as it looks toward phase 1 production.

Funds are marked for a proof of concept facility and engineering and design construction for Arizona Lithium’s (ASX:AZL) first production pad.

Opting against a sophisticated investor placement, AZL decided it would be best for loyal shareholders to participate ahead of milestones which could potentially increase the company’s value.

Watch: Ticking key approvals at the Prairie project

Those include the beginning of construction towards commercial production, strategic offtake and financing outcomes, updates on a Koch direct lithium extraction unit and a reworked exploration plan for its Big Sandy lithium project in Arizona.

Ordinary holders can buy up to $30k in fully paid ordinary shares at $0.006 a pop, coming with two free attaching options for every three purchased, exercisable at $0.012 and expiring three years from issuance.

All AZL directors intend to take up their own full $30k entitlement and the company said most of its larger shareholders had expressed intent to do the same.

Azure managing director Paul Lloyd said the company was pleased to offer shareholders the opportunity to participate in the plan to further advance development of Prairie.

“Importantly, the commencement of the proof of concept commercial-scale facility at the Prairie project and construction at Pad #1 will add significant value to the company,” Lloyd said.

“We have had tremendous interest from potential strategic partners and have sent product samples to multiple global and Fortune 500 companies.

“The more we develop out the project, the closer we get to landing a transformational partnership with one of these entities.”

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Big home on the Prairie

An updated phased development plan for the project slashed the starting capex from US$290m to US$22m for an initial 150tpa of lithium carbonate equivalent using commercial-scale extraction technology from US sector leader Koch.

The company believes proof of concept production at Pad #1 can be quickly replicated across other sites successfully drilled and derisked late last year.

The company already has a key water licence, approval for construction and consent from its oil & gas neighbours to dispose of its brine once depleted of lithium.

The fully owned project holds a 6.3Mt lithium carbonate equivalent resource across more than 390,000 acres of mineral rights, and AZL has other lithium assets in Arizona and New Mexico to advance as prices started to show signs of life in the last batch of quarterlies.

This article was developed in collaboration with Arizona 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.