Image: Altura Mining.
By Cameron Drummond
LITHIUM explorer Altura Mining has reached an agreement with Chinese battery manufacturer Shaanxi J&R Optimum Energy (J&R Optimum) to raise $41.6 million for its Pilgangoora lithium project in the Pilbara region of WA.
In two tranches, Altura will issue a placement of 306 million fully paid shares to J&R Optimum at 13.6 cents per share, an 8.8 per cent premium from the last closing price.
In Tranche 1, 123 million shares would be issued after the receipt of funds ($16.73m) from J&R Optimum within 30 days; and Tranche 2 would issue the remaining 183 million shares ($24.89m) pending shareholder approval at an upcoming EGM (Extraordinary General Meeting).
Upon completion of the placement, J&R Optimum would have a 19.9 per cent stake in Altura and be entitled to appoint a director to the Altura board – provided its shareholding did not drop below 15 per cent.
J&R Optimum is a producer of lithium iron phosphate (LiFePO4) long-life battery systems for use in applications such as solar panel units and electric vehicles.
Listed on the Shenzhen Stock Exchange, the company has a market capitalisation of $5 billion, with 18 processing plants currently in operation or under construction across several Chinese provinces.
The deal would give Altura the necessary funding to push ahead with construction in line with Altura’s plan to begin mining operations at Pilgangoora by late 2017.
Altura managing director James Brown said the outcome of the placement was an excellent result for both companies.
“Our groups have the same strong vision and expectation of delivering growth and excellent results for all of our respective stakeholders,” Mr Brown said.
“This transaction significantly de-risks the Pilgangoora Lithium Project and provides a strong lead to debt funding groups as Altura works towards finalising the complete financial package for the project.
“The alliance is also a significant acknowledgement of the high standard of work achieved by the Altura development team and consultants with the recently completed Definitive Feasbility Study.”
Earlier this year, Altura signed a non binding off-take agreement for at least 100,000 tonnes per annum (tpa) of lithium concentrate with Optimum Nano, a company bought by J&R Optimum in July for nearly $1 billion.
Altura has a binding off-take agreement for its lithium concentrate with another Chinese company Lionergy for a minimum of 100,000tpa over an initial five year period.