Lithium pioneer Sayona Mining [ASX:SYA] has said that it will be releasing $54.9 million in shares in order to raise funds for supporting its advancement in hard rock lithium exploration projects in Québec, Canada.
The group hopes these funds will assist in the forthcoming restart of its North American Lithium Project (NAL). They’re also expected to propel the explorer to the transition from being a lithium explorer to a lithium developer.
The $54.9 million worth of shares will be sold for 31.5 cents each, which represents a 34% premium to its last closing price.
As a result, SYA surged more than 6% by early afternoon, having taken a boost to 11% in the week and more than 92% in the year. Compared to the rest of the lithium mining sector, SYA’s shares have a 91% value advantage on the 12-month average:
Sayona unleashes shares for $54.9 million lithium funds
The Canadian lithium pioneer has expressed its desire to shift from lithium explorer to lithium producer, and to get itself there faster, the company has decided a capital fund raising is in order — for $54.9 million, pre costs.
This’ll be achieved via a subscription agreement with PearTree Securities, which will enable them to release 174,459,177 shares at a price of 31.5 cents per share using the FTS provisions under Canadian tax law.
The miner said that in raising this sum, it’ll be able to advance its exploration efforts, while also allowing to progress of restart of its North American Lithium (NAL) operation, and also boost its growth prospects in Québec — which includes its emerging lithium hub.
Funds will be applied to exploration and drilling at its Québec site, allowing an acceleration of drilling at priority targets, as well as prospecting, gravity, stripping, and channel sampling. It’ll also cover staffing expenses.
The company said it’s already well placed to progress its lithium resource expansion, however, the additional funding it will earn through the issuance of extra shares will add to its financial resources and will possibly get it there faster.
Sayona’s Managing Director Brett Lynch commented:
‘Sayona has made significant progress in developing the leading hard rock lithium resource base in North America, with the pending restart of production at NAL set to mark our progression from explorer to producer.
‘This funding will provide an added boost to our expansion plans, with the FTS provisions allowing us to raise capital at a premium to the current share price, thereby minimising dilution for the benefit of our shareholders.’
Sayona’s new shares will be issued under its placement capital, under necessary and required ASX listing rules, and is expected to begin Thursday, 9 March.
New shares are also to rank equally with existing shares on issue.
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For The Daily Reckoning Australia