Sophisticated and institutional investors have backed Lithium Australia (ASX: LIT) by participating in a heavily oversubscribed $4 million placement.
The company issued almost 75.5 million shares at $0.053 each under the placement with BW Equities acting as lead manager.
According to Lithium Australia, the $0.053 share price is a 16% discount to the company’s previous five-day volume weighted average trading price.
Lithium Australia managing director Adrian Griffin said the strong demand for the placement was an endorsement of the company.
“Our diversified exposure to the fast-growing battery industry makes this investment opportunity unique.”
“Lithium Australia has significant intellectual property in terms of battery technology and a sound understanding of the entire battery supply chain.”
Mr Griffin added that the Australian Government had recognised the company’s activities through the award of several substantial research grants to progress the country’s battery capabilities.
Eligible shareholders will be able to participate via a $2 million share purchase plan with new shares to be issued at the same price of the placement and discount.
Funds to accelerate Lithium Australia’s commercialisation strategy
Lithium Australia will use the $6 million in additional cash to advance its various business units.
“Together the placement and share purchase plan will allow Lithium Australia to fast-track the growth of Soluna Australian and Envirostream Australia, both, of which, anticipate significant revenue growth this year,” Mr Griffin explained.
Funds will be channelled into enhancing Lithium Australia’s battery recycling entity Envirostream Australia’s marketing and collection network.
They will also be used to facilitate commercialisation.
At Lithium Australia’s 50%-owned battery storage system company Soluna Australia, proceeds will be used towards marketing the systems.
Lithium Australia anticipates these activities will see increased cash flow from Envirostream Australia and boost sales of the Soluna Australia systems.
Via its vertically integrated business units, Lithium Australia aims to maximise use of resources, while minimising its environmental footprint and reducing the number of process steps from mine pit to product and back again.