Anson Resources [ASX:ASN] has raised $50 million via a placement to develop its Paradox Lithium Project.
Anson said it upsized its placement to ‘accommodate significant demand from institutional investors’.
ASN will issue 139 million new shares at 36 cents per share, a 15.3% discount from its last closing price.
Unsurprisingly, ASN shares fell on Friday, falling as much as 8% in late afternoon trade.
Anson said the fresh funds would sustain it to a final investment decision (FID).
The placement follows Anson declaring ‘outstanding economics’ for its Paradox Lithium project DFS (definitive feasibility study).
Over the past 12 months, ASN shares have gained 320%.
Source: TradingView
Anson taps market for $50 million
On Friday, the lithium miner declared that it had received binding commitments from institutional and sophisticated investors valued at $50 million through a single tranche placement of around 139 million shares.
New shares are said to be issued at 36 cents each, a 15.3% discount to the last closing price on 14 September, a 3.9% discount to the 10-day VWAP, and an 11.1% discount to the 5-day VWAP.
Anson has taken the support and interest via the placement as a positive sign for its plans to develop the Paradox Lithium Project, transforming it into a major supplier of high-purity battery grade Lithium.
This placement has meant new institutional investors have been able to become part of the company’s share register, furthering the miner’s support base in parallel with funds.
Anson revealed it’s now fully funded for ‘rapid development’ of its Paradox Project, leaning towards a Final Investment Decision in Q2 2023.
Paradox will undergo front-end engineering design, permits, construction obligations, further resource expansion, and the bringing about of the ‘Western Strategy’.
ASN’s Executive Charmain Bruce Richardson commented:
‘The result of the capital raise is an outstanding endorsement of the Paradox Lithium Project and made in USA battery grade lithium carbonate. We were delighted to price the Placement at a tight discount to the prevailing VWAPS, despite immediately following a significant market downward correction.
‘Interest in the Placement far exceeded Anson’s requirements with Anson upsizing to $50 million to facilitate access to the register for quality investors. The placement register provides a strong shareholder base upon which to progress the next phase of the Project’s development.
‘The funds raised will allow for expanded project development workstreams and accelerate Anson toward a Final Investment Decision on the Project.’
Placement settlement is to occur on Monday, 26 September.
Paradox is expected to produce an initial 3,074 tonnes per annum for an initial 10 years of project life and then even out to a more commercial standard for another 23 years after that.
Project revenue for Phase 1 is estimated to reach around US$5,080 million.
On Wednesday, Anson released resource drilling results of Paradox’s Cane Creek, revealing Clastic Zone 43 has a thickness of 29 metres, returning 108ppm lithium, with remaining Zone samples sent away for testing.
Results were 40% higher than average grades in previous samples from the last JORC report.
ASN shared that it has strong support from ‘high-quality’ international and domestic institutional investors and has seen through 12 months of project development works around its major Resource upgrade, binding MOU with Sunresin, and DFS results announced last week.
This means Anson will be able to place itself as a key player in the electric vehicle (EV) market in the US, where there is a magnitude of loans, initiatives, and government support pushing to get the industry boosted with the production of critical battery minerals, including lithium.
EVs remain a strong industry
Biden’s impassioned public campaigning for the US economy’s EV prospects strengthened the odds for US-based lithium developers, which makes it a good place for developers like ASN.
And though 2021 saw lithium stocks dominating the ASX, that doesn’t necessarily mean the time for tipping lithium stocks has passed.
In fact, our analysts recently revealed three Aussie lithium stocks that have been severely overlooked.
Regards,
Kiryll Prakapenka,
For Money Morning
