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Lithium producer Tawana Resources has secured the $40 million it needs to pursue an ASX listing with Singapore-listed merger partner Alliance Mineral Assets.

The Tawana (ASX:TAW) share price leapt as much as 28 per cent to an intra-day high of 32c on the news.

Tawana holds a 50 per cent interest in the Bald Hill lithium and tantalum mine, in the eastern Goldfields of Western Australia, which started commercial production in July this year.

Its shares dived earlier this month when investors were told the merged company could not meet the ASX’s requirements for an ASX listing.

The $40 million funding package from a consortium of lenders — led by Tribeca Investment Partners — strengthens Tawana’s balance sheet and is expected to expedite the ASX listing of Alliance.

Tribeca’s Hayden Smith said the company, having reviewed most hard rock spodumene projects globally, saw Bald Hill as “incredibly strategic”.

Spodumene is the main lithium bearing mineral mined from most hard rock lithium mines around the world.

“The project has the lowest capital intensity in the sector and produces a coarse product anomalously low in magnesium, iron, mica and other deleterious materials, making it highly sought after by lithium converters,” Mr Smith said.

“We believe that Bald Hill spodumene will ultimately command its own pricing mechanism, much like high grade iron ore or high energy thermal coal.”

An initial $20 million will be used by Tawana to fund proposed fines lithium and tantalum circuit additions, which are expected to increase the throughput and recovery rates at Bald Hill.

The remaining $20 million for the merged company is conditional on merger completion and Alliance receiving conditional ASX listing approval.

Tawana and Alliance Merger remained on track, with Alliance shareholders “overwhelmingly voting in favour of all merger-related resolutions including adoption of an ASX compliant constitution”, Tawana said.