MetalsTech down as much as 46pc after backflip on ‘cornerstone placement’
Lithium and cobalt play MetalsTech will move forward with its exploration despite its Chinese partner pulling out of a $3 million investment.
MetalsTech (ASX:MTC) said today that battery maker Dynavolt Rewable Energy Technology had defaulted on its investment after completion of due diligence.
The deal, announced on December 6 as a “cornerstone placement”, was for 10 million shares through an escrowed placement at an issue price of 30c per share.
But after an extension to its timeline, Dynavolt terminated the agreement on February 1:
“Dynavolt is not satisfied with the outcome of the due diligence on the company and is of the view that the subscription proposed under the Terms Sheet will not be in conformity with the development strategy of Dynavolt.”
MetalsTech shares fell as much as 46 per cent to 12c — and were trading down 30 per cent at 15.5c at 10.45 AEDT Monday.
MTC described the default as “disappointing”, speculating that its proposed partners own circumstances were more likely the cause of the backflip.
“MTC is seeking advice as to whether Dynavolt has acted unlawfully, however as it is possible that Dynavolt’s purported termination has been influenced by an adverse change in its own financial and corporate circumstances, from a practical standpoint Dynavolt may not be capable of completing,” it said.
The $3 million blow won’t stop MTC’s exploration – the company telling shareholders it is fully funded for plans at its Adina Lithium project in Quebec where drilling is scheduled for February 14.