Galan Lithium is tapping investors for $19.5 million to help fund the phase 1 development of its Hombre Muerto West lithium brine project in Argentina.
Galan Lithium is tapping investors for $19.5 million to help fund the phase 1 development of its Hombre Muerto West lithium brine project in Argentina.
The West Perth-based company told the market on Wednesday it had secured firm commitments from investors to raise $18 million through a placement priced at 46 cents per share.
Additionally, Galan will undertake a share purchase plan of $1.5 million to existing shareholders.
This SPP will be at the placement price of 46 cents per share, however will include one listed option - exercisable at 65 cents per share over a five-year period, on a one-for one basis minus brokerage fees.
Production is tipped to begin at the facility early in 2025.
Lithium prices have shed considerably over the past year due to a drop in demand, despite booming supply levels.
This is primarily due to electric vehicle sales being lower than anticipated in the US, coupled by a reduced production uptake from China.
As a result of battery minerals sector downturn, several companies, including US speciality chemical provider Albemarle, have slashed costs - while Zenith Minerals said on January 15 it was flagging a strategic review of its lithium operations.
Galan managing director Juan Pablo Vargas de la Vega was heartened by the support shown from investors.
“We are very pleased with the outcome of the placement considering the tougher market conditions at the moment," he said.
"The strong support from both new and existing institutional investors is a clear endorsement of Galan’s timely path to low cost, phase 1 production at its 100 per cent owned Hombre Muerto West lithium brine project in Argentina.”
Galan last traded at 45.5 cents per share, down 16 per cent, as of 9.38am AWST.
