Sayona Mining raises $200m to accelerate North American Lithium project
Sayona Mining’s (ASX: SYA) position as a key player in the desperate push to create a North American lithium industry has been recognised with the significant support the company received in a $200 million bookbuild for a capital raising.
Sayona and fellow ASX-listed miner Piedmont Lithium (ASX: PLL) created significant headline news earlier this year when they brought the North American Lithium (NAL) project in Quebec back into production.
NAL is considered the most significant source of hard rock lithium production in North America and its re-start has been identified by the Canadian and US governments as a milestone in a major push to develop a domestic battery metals industry.
Funding to speed up further development
Sayona has received considerable support from professional and sophisticated investors in the fully underwritten A$200 million two tranche placement.
The bookbuild for the placement was completed by Petra Capital who acted as sole lead manager, sole bookrunner and sole underwriter to the placement. Desjardins Capital Markets acted as co‐managers on the placement.
The raise will be conducted at $0.18 per share, a 14.3% discount on its last traded price of $0.21 per share.
Proceeds from the placement will largely be applied towards a range of activities aimed to accelerating Sayona’s north American lithium developments.
This includes an outlay of $65 million on Sayona’s Abitibi Hub assets. Funding will assist with development of project infrastructure, new capital expenditure assessment of downstream lithium chemical production options studies for the North American Lithium project.
Elsewhere $40 million in funding will be allocated to accelerate mine development studies, downstream lithium chemical assessment and infrastructure planning within the company’s Norhern Hub portfolio.
A further $90 million will be outlaid for working capital, including production ramp‐up working capital (if required), corporate costs and development funds as required and transaction costs.
A major focus of the use of the new capital injection will target Sayona’s northern Québec lithium hub and the Moblan Lithium Project.
Currently drilling
A key plank in that program is the current 60,000m drilling campaign and work on a resource upgrade.
Sayona is also undertaking feasibility studies investigating a new mining operation located near established infrastructure and with potential for downstream processing.
Managing director, Brett Lynch, said the new funding will also support the ongoing production ramp‐up at the NAL project and expedited mine development studies, along with assessment of downstream options including lithium carbonate production and associated infrastructure planning.
“This funding will bolster Sayona’s balance sheet strength and accelerate the development of already North America’s leading hard rock lithium resource base, currently its only significant source of spodumene production,” he said.
“The focus of the investment will be on fast‐tracking feasibility work to commence spodumene (lithium) production at our Moblan Lithium project in 2027, also targeting the establishment of integrated downstream production facilities in Québec.
“The funding will also accelerate the ramp‐up of production and capacity at NAL, with further investment into planned lithium carbonate production, supporting Québec’s ambitions to become an integrated producer of battery materials.
NAL critical for Canada
While Canada is known as significant holder of lithium reserves, it has not had any significant lithium production in recent years prior to the successful revitalised developments at the NAL project.
Production at NAL was suspended in 2019 with the operators seeking bankruptcy protection. It was eventually acquired by Sayona Québec, the joint venture between Sayona Mining and Piedmont Lithium, in 2021.
The restarted NAL plant is targeting annual production capacity of up to 226,000t of spodumene concentrate.
The project achieved major milestone in mid-March with the successful production of the first saleable spodumene concentrate.
Under an agreement with Piedmont, the NAL is selling the greater of 50% of production volume or 113,000t of spodumene concentrate to Piedmont, with concentrate allocation to be applied pro‐rata during each shipment.
Canada has been a net importer of lithium and lithium products. The nation’s lithium imports totalled C$161 million (A$181 million) in 2020, up from C$149 million (A$168 million) in 2019. Lithium imports consist of lithium oxide and hydroxide, lithium carbonates, and manufactured lithium batteries.
The Canadian and US governments have allocated millions in recent years to develop a lithium business with the aim of creating domestic battery metal supplies and to guard against perceived Chinese supply controls.