Piedmont Lithium (ASX: PLL) has raised $70 million through a US public offering of its American depositary shares (ADSs) to advance the development of the Piedmont lithium project in North Carolina.
The company offered 2 million ADSs – each representing 100 ordinary shares – at an issue price of $35.25 each, representing a 13% discount to the 20-day volume weighted average price on the ASX of $0.406.
Loop Capital Markets and Roth Capital Partners acted as co-managers for the exercise, with Evercore ISI, Canaccord Genuity and ThinkEquity (a division of Fordham Financial Management Inc) being the joint bookrunners.
Piedmont has agreed to grant the underwriters a 30-day option to purchase up to an additional 300,000 depositary shares at the offering’s issue price.
Capital raised from the public offering will be put towards continued development of the Piedmont project including the delivery of a definitive feasibility study, testwork, permitting, further exploration drilling, ongoing land consolidation and general working purposes.
Piedmont Lithium owns 100% of the Piedmont project, which is located within the prolific Carolina Tin-Spodumene Belt (TSB) and along trend to the Hallman Beam and Kings Mountain mines, which provided most of the western world’s lithium between the 1950s and 1980s.
The TSB is believed to be one of the largest lithium provinces in the world and has been considered a premier location for the development of Piedmont’s lithium business based on its favourable geology and easy access to infrastructure, power, downstream lithium processing facilities, and lithium and battery storage research and development centres.
Earlier this year, the company released a pre-feasibility study for a proposed lithium hydroxide chemical plant and a scoping study for the integrated mine-to-hydroxide project to produce spodumene concentrate for transport to the plant where it will be converted into battery-grade lithium hydroxide.
Both studies confirmed potential for the project to be a strategic and low-cost producer, with the plant creating an alternative to China’s numerous merchant spodumene converters and its dominance of the world’s lithium hydroxide market.
It could potentially provide automotive manufacturers with a secure and independent American source of material that is critical to their supply chains.
Last month, Piedmont signed a cornerstone offtake deal with Tesla Inc for the supply of spodumene concentrate from the Piedmont project.
Deliveries of the lithium-rich concentrate – which will be used in the manufacture of the lithium-ion batteries to power Tesla’s electric vehicles – will mark the beginning of the first US domestic lithium supply chain.
Tesla will buy the concentrate at a fixed rate to remove the volatility from a commodity which has steadily fallen in price since mid-2019.
Piedmont said it would accelerate the development of its project to support Tesla’s plans.