Lithium Universe Ltd (ASX:LU7, OTC:LUVSF) has received commitments to raise A$2.14 million via a placement and has launched an entitlement offer to raise up to A$1.02 million with funds to go towards the completion of a definitive feasibility study (DFS) for the Bécancour Lithium Refinery in Québec, Canada.
The raise seeks to maintain the company’s momentum as it moves closer to establishing the refinery in Bécancour.
LU7 executive chair Iggy Tan said, “We are pleased with the outcome of the placement in a challenging market, which reaffirms support for the company’s strategy to complete the definitive feasibility study for the Bécancour Lithium Refinery.
“On September 30, 2024, the company reached a significant milestone, having released the positive and robust preliminary feasibility study, displaying strong fundamentals despite the current low lithium pricing environment.
“If fully subscribed, proceeds from the placement and entitlement offer will strengthen our balance sheet, bringing us closer to establishing an operational lithium conversion plant in Bécancour, Québec.”
Share placement
LU7 has received binding commitments from sophisticated and professional investors to raise $2.14 million via the issue of 171.32 million fully paid shares at $0.0125 per share.
The placement is to be undertaken in two tranches — issuing 155,320,000 shares raising $1,941,500 in tranche 1 and 16 million shares for $200,000 in tranche 2. Tranche 1 shares will be issued on November 8, 2024.
Tranche 2 shares and all options to be issued under the placement are subject to shareholder approval.
Entitlement offer
The company also intends to undertake a non-renounceable entitlement offer of 1 share for every 10 shares held by eligible shareholders at the same issue price as the placement of $0.0125, to raise up to $1.024 million.
Participants in the entitlement offer will also receive free attaching options on a 1 for 1 basis.
Tan said, “The company is highly committed to our shareholders and I am pleased we can offer them the same investment terms extended to sophisticated and professional investors.
“The board and management team remains dedicated to engaging with our existing shareholders and delivering against our strategy."