Raised funds will assist Galan in continuing its work on a JORC-compliant resource at its Candelas Lithium Brine Project in Argentina, as well as pre-feasibility studies and a drilling program on the project’s western tenement.
The company received firm commitments from sophisticated investors to raise $1 million through a share placement at 18 cents a share with one free unquoted option issued for every two shares held.
Existing eligible shareholders will also be offered shares, issued at the price of 18 cents each, plus one free unquoted option exercisable on or before August 31, 2020, at 25 cents a share.
Placement shares to be issued under the company’s existing placemen capacity amount to 5,555,555 shares along with 2,777,777 options.
The placement share price is a discount of 1% to 18.14 cents, which is the volume weighted average market price over the last 5 days Galan’s shares were traded.
Galan intends to raise $1 million in the placement but reserves the right to accept additional applications subject to shareholder demand.
However, the number of shares to be issued will not be greater than 30% of the number of shares on issue.
READ: Galan Lithium to test ion exchange technology for lithium brine processing at Candelas project
Depending on the amount of applications received, the company may undertake a scale-back so that not more than $1 million is raised or not more than 30% the number of shares on issue.
The share purchase plan will not be underwritten and Galan’s board of directors who are eligible shareholders intend to participate under the plan.
The lithium explorer recently received permits to conduct a maiden drilling program over its Western Basin projects on Argentina’s Hombre Muertos alar, which hosts high-grade and low impurity lithium deposits.
The granted permits allow Galan to drill 14 holes plus five water bores within 18 months.
Drilling will target highly conductive anomalies recorded from controlled source audio frequency magnetotelluric surveys completed in September last year.