A week after launching a definitive feasibility study into its proposed integrated lithium chemical business, Piedmont Lithium (ASX: PLL) is undertaking a United States public offer of up to 1.5 million of its American Depository Shares (ADS) listed on the Nasdaq Capital Market.
Each ADS represents 100 of Piedmont’s ordinary shares listed on the ASX.
On 19 March 2021, the last reported sale price of Piedmont’s ordinary ASX shares was $1.085 each. The company says this is equivalent to US$84.12 per ADS – in accordance with the exchange rate on that date and the ADS-to-ordinary share ratio of 1:100.
Plans to make Nasdaq primary listing
The US public offer is keeping with Piedmont’s strategy to grow its US investor pool and plans to redomicile from Australia to the US, which was announced in December last year.
Piedmont’s proposal to redomicile to the US is expected to boost attractiveness of the group in the US, with the shift anticipated to result in Piedmont becoming “more fully valued over time by a greater number of investors”.
Additional benefits to the move include “improved access to lower-cost debt and equity capital” in US markets, which Piedmont describes as larger and more diverse than Australian capital markets.
Piedmont says this will enable it to source cheaper funding to underpin its growth plans more easily.
The move to redomicile is scheduled to begin this month and will be carried out through a scheme of arrangement.
To implement the arrangement, Piedmont has entered into a scheme implementation deed which will see newly formed Piedmont USA becoming the ultimate parent company of the Piedmont group.
Once completed, Piedmont’s primary listing will become the Nasdaq Capital Market. However, it will retain an ASX listing via chess depositary interests.
Sayona Mining investment
As part of Piedmont’s ongoing growth strategy and aspirations to become an integrated lithium miner and chemical producer for the battery industry, it is acquiring a 19.9% interest in Sayona Mining (ASX: SYA) and a further 25% holding in Sayona’s wholly-owned subsidiary Sayona Quebec.
The deal also includes a binding offtake agreement which will see Piedmont purchasing 60,000 tonnes per year or 50% of its planned spodumene concentrate production (whichever is greater) from its Quebec lithium projects.
Piedmont’s president and chief executive office Keith Phillips said the deal with Sayona had multiple benefits to the company.
“The investments are additive to Piedmont from a resources and reserves perspective, and the spodumene supply agreement will offset our Tesla commitments in the near term and position us for longer term growth in lithium hydroxide production,” he said.
Definitive feasibility study into integrated lithium business
With additional spodumene locked-in from Sayona, Piedmont has kicked-off the definitive feasibility study for its proposed integrated lithium business in North Carolina.
The study is evaluating Metso Outotec’s alkaline pressure leach technology which omits the acid roasting step currently used in conventional spodumene conversion.
As part of this, Metso has joined Piedmont’s technical team which includes Primero Group and Marshall Miller and Associates.
“In adopting the innovative Metso process, we hope to deliver enhanced DFS economics, while also positioning the Piedmont lithium project to have a lower environmental impact than any of the lithium hydroxide projects currently operating and under construction around the world,” Mr Phillips explained.
“As the only spodumene-to-hydroxide lithium project in the US, Piedmont is at the nexus of three important mega-trends – the ‘electrification of everything’, the ‘localisation of supply chains’, and the ‘decarbonisation of the economy’.”
“As our DFS progresses, we will continue to engage in discussions with prospective customers and strategic investors to optimally position our North Carolina operations for development later this year,” Mr Phillips added.
The DFS is scheduled to be completed in the September quarter, with construction of concentrate operations anticipated to be finished by the end of 2022. The lithium chemical plant is expected to be completed in 2023.