Solis Minerals Ltd (ASX:SLM, TSX-V:SLMN, OTCQB:SLMFF) has received firm commitments to raise A$8.155 million through a placement of shares to sophisticated and professional investors as well as North American institutional funds.
The issue price of A$0.55 represents a modest discount of 6.78% to the last closing price of A$0.59 and a 57% premium to the 10-day VWAP (volume-weighted average price) of A$0.35.
Solis’ largest shareholder, Latin Resources Ltd (ASX:LRS, OTC:LRSRF), has committed to participating in the placement, increasing their substantial holding to 17.79%, while directors have subscribed for A$200,000.
The company is now fully funded to start exploration drilling at the Jaguar and Borborema lithium projects in Brazil.
Solis executive director Matt Boyes said: “We are delighted to announce the completion of the placement, which has enabled us to introduce a number of new, sophisticated shareholders to the company’s register.
“The placement validates the portfolio of assets the company has recently acquired and our focus on the upcoming drilling program and building a new battery minerals business in South America.
“I want to welcome new shareholders and thank our existing ones, particularly Latin Resources, for their continued support and validation of our lithium strategy and investment in an emerging lithium district in Brazil.”
Read: Solis Minerals soars on deal to acquire high-grade hard rock lithium project in Brazil
Solis recently signed a binding agreement to acquire the Jaguar Lithium Project in Bahia state, Brazil, which has confirmed spodumene grades of up to 4.95% Li2O (lithium oxide) from rock chip samples.
The Jaguar pegmatite is an extensive pegmatite body mapped over 1 kilometre of strike with widths in excess of 50 metres containing coarse visible spodumene exposed across the pegmatite body.
Investors have reacted strongly to the acquisition, with Solis shares rising 442% from A$0.14 cents on 26 May to A$0.76 cents currently.
Capital injection to start drilling
The placement provides Solis with a significant capital injection to:
complete the option fee and (subject to the completion of due diligence) the option exercise fee for the acquisition of the Jaguar Lithium Project;
advance the exploration of the Jaguar Lithium Project, with drilling to start before 30 June 2023;
advance the Borborema Lithium Project in the North East of Brazil;
continue to explore the Peruvian IOCG and copper porphyry projects; and
continue to assess and execute suitable project acquisitions and contribute to ongoing general working capital.
Option funding agreement
Solis has entered into a non-binding term sheet with Lind Partners for a further financing of A$2 million, which will be repaid from funds received on exercise of the company’s A$0.30 unlisted options currently on issue.
In consideration for the option funding agreement, and subject to shareholder approval, Lind Partners will receive 3,000,000 unlisted options with an exercise price of A$0.77, expiring 12 months from the date of issue.
Lind Partners will also receive a fixed interest fee of 10% and standard establishment fee.