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Lake Resources completes $2 million placement and launches $1.5 million share purchase plan

The company is focused on securing funding for the development of its three lithium brine projects and hard rock project in Argentina.

Lake Resources NL - Lake Resources completes placement and launches share purchase plan for its Argentinian lithium projects
Larger samples from the pilot plant are expected to be produced in late March

Lake Resources N.L. (ASX:LKE) has completed a $2 million private placement, launched a share purchase plan (SPP) to raise up to $1.5 million and completed the close-out of a convertible securities facility ahead of schedule.

The company has welcomed the support of investors for the placement, receiving commitments to raise $2 million, before costs, through the issue of around 50 million shares at a price of 4 cents per share.

This private placement has been made to sophisticated and professional investors using Lake's existing placement capacity under ASX Listing Rules 7.1 and 7.1A.

SPP for eligible shareholders

The SPP will be offered at the same price to existing eligible shareholders with the aim to raise up to $1.5 million and will close on February 28, 2020.

Lake’s managing director Steve Promnitz said: “Lake welcomes the support of investors and is pleased to offer existing shareholders the opportunity to increase their investment, as the company enters an exciting phase of project development at Kachi, amid growing investor support for the lithium sector.”

The funds raised will fast-track the delivery of larger samples from Lake's Kachi Lithium Brine Project's pilot plant to potential off-takers and project partners.

 “Unique opportunity”

Promnitz said: “Lake is developing a sustainable solution to lithium production using some very promising technology that produces lithium carbonate with very low impurities.

“This is a unique opportunity that is gaining traction with battery and EV companies and potential off-takers.

“This last week, the German and French governments have committed to producing the most sustainable lithium batteries in the market for EVs.

“The current large Tier 1 battery makers have made similar comments.”

Lake is now entering a key phase of development as it undertakes discussions with downstream entities as well as financiers, regarding the potential joint development of the Kachi project in Argentina.

Convertible securities facility

Along with the placement and SPP, Lake announced the early close out of a convertible securities funding facility with SBI Investments through a combination of both a cash payment and the issue of shares.

The two-tranche convertible securities funding facility was announced in February 2019 and played an important role in facilitating the progression of the pre-feasibility study (PFS) for the Kachi Project and the testing and development of a sustainable and scalable direct extraction method.

Under the formal agreement, the company must make a cash payment of $1,959,615 on or before February 14, 2020, and issue SBI with 11,558,021 ordinary shares on or before February 11, 2020.

Lake has also negotiated short term unsecured debt facilities totalling $600,000, part of which will be applied to the cash payment for the early close out.

Funds for fast-tracking

As well as being used to produce further high purity samples for off-takers to conduct qualification testing using the Lilac direct extraction process, the funds will be used for the development, construction, transport and operation of the pilot plant.

Lake will also use the funds to complete the PFS, for general exploration, the costs of the SPP offer and the placement, and additional working capital.

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ASX:LKE
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Market Cap: $22.14 m
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