Lithium Universe Ltd (ASX:LU7, OTC:ESMAF) has raised more than A$3.64 million from sophisticated investors with proceeds to assist in the company’s strategy to close the lithium conversion gap through its Canadian downstream processing plan.
The capital raising has been completed at a price of A$0.02 for each one fully paid ordinary share subscribed for a total of A$3,644,333.34.
DFS funds
Funds will primarily be used for a definitive feasibility study (DFS) for the Québec Lithium Processing Hub (QLPH) concentrator as well as a DFS for the QLPH Li Carb Refinery.
The company will set aside A$1.1 million for both of these key studies.
“Strong support”
“We are delighted with the outcome of this capital raising in a very difficult market, which demonstrates the strong support by sophisticated investors for our QLPH’s business strategy," LU7’s executive chairman Iggy Tan said.
"I look forward to rewarding all shareholders by the anticipated success from this strategy.”
Cap raise details
The raising will be conducted in two tranches, being:
- Tranche 1 – 95,016,667 fully paid shares (expected on May 10, 2024); and
- Tranche 2 – 87,200,000 shares to be issued subject to shareholder approval at the company’s Annual General Meeting (AGM) on June 14, 2024 (expected June 28, 2024, pending approval).
One option will also be issued for every two fully paid shares subscribed for with an exercise price of A$0.03 per option and an expiry date of 18 months.
The issue of these options will be subject to shareholder approval at the company’s AGM and it is intended that the options will be listed on the Australian Securities Exchange (ASX).
Lithium Universe also intends to grant 1:2 options to those who participated in the recent share purchase plan which raised $463,500.
As well as the DFS work, the company proposes to allocate A$400,000 for exploration on its Canadian and Australian portfolio along with A$1.04 million for corporate, working capital and offer costs.