The placement funds will primarily be used for Latin Resources to spread its wings on a drilling program through the entirety of 2024. Pic via Getty Images
Mining
A $35m placement to institutional, sophisticated, and professional investors will provide a hefty capital injection as Latin Resources accelerates drilling efforts at its Brazilian Salinas lithium project in 2024.
Latin Resources’ (ASX:LRS) 45.2Mt at 1.32% Salinas lithium project has been the focus of a major 65,000m drill program, designed to increase the footprint of the Colina deposit in preparation for an updated resource estimate later this quarter.
With 10 drill rigs on the go, the $645m market cap explorer is hoping to grow its resource base at Salinas to become a tier one lithium project, one Latin believes could establish the company as the second largest spodumene concentrate producer in Brazil.
It could also be the lowest cost spodumene concentrate producer in the world once Colina gets into production in 2026.
The massive placement follows a preliminary economic assessment (PEA) at Colina which forecast an after-tax NPV of $3.6b, an IRR and a total life-of-mine revenue of $12.6b.
Latin Resources is chasing first production in 2026 following a Phase 1 capex of US$253m, while US$55m spent on Phase 2 will bring the asset’s production profile to 525,000tpa @ 5.5% lithium spodumene concentrate and 159,000tpa @ 3%.
Hear from Chris Gale on the Colina PEA with Stockhead’s Sarah Hughan below.
Latin now has significant headroom to go all-in on its aggressive drilling campaign planned for 2024 after completing the $35m placement priced at A$0.25 per share.
The offer price represents a 5.7% discount to the last closing price of A$0.26 on 19 October, an 11.7% discount to the 5-day VWAP of A$0.283, and a 11.1% discount to the 10-day VWAP of A$0.281.
“We are delighted to announce the completion of the placement, which will enable the company to continue to grow its Salinas resource to become a Tier one lithium global project,” Latin Resources managing director Chris Gale says.
“I would like to thank all new and existing shareholders for their ongoing support and look forward to accelerating the development of Latin’s Salinas project as we continue to meet our objectives.”
The company will release a DFS in the first half of 2024, with the final investment decision expected to be announced in Q4, 2024.
This article was developed in collaboration with Latin 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.
