Infinity Lithium Corporation Ltd (ASX:INF) has received firm commitments to raise $2.2 million through a placement which will support the company's growing momentum for its integrated European supply strategy.
The placement was oversubscribed and heavily supported through European and Australian institutional and sophisticated investors with funds to advance the company's San José Lithium Project in Spain.
Proceeds will complement the funding commitment of approximately $1.3 million (€800,000) from KIC InnoEnergy SE to accelerate progression of the feasibility study for San José.
The company also intends to undertake an entitlement offer to raise about $2.4 million on the same terms as the placement.
“Strong European support”
Infinity managing director and CEO Ryan Parkin said: “The placement has been very well supported in Europe by institutional and sophisticated investors that are focused on the inevitable EU transition to electric mobility.
“Europe continues to rapidly progress sustainable projects aligned to the EU battery supply chain, and the inclusion of lithium on the EU critical raw material list has highlighted the strategic importance of lithium and more importantly lithium chemical production in Europe.”
Shares have been as much as 16% higher to A$0.089 intra-day.
European Raw Materials Alliance
European Commission (EC) vice president Maroš Šefčovič recently presented an Action Plan on Critical Raw Materials and announced the upcoming launch the European Raw Materials Alliance (ERMA).
The ERMA will be modelled on the successful European Battery Alliance, which has already boosted the EU’s capacities in the lithium industry.
This new alliance is expected to mobilise industrial and innovation actors, member states, regions, the EIB, investors, social partners and civil society – in order to help build capacities along the entire value chain, from mining to waste recovery.
San José perfectly placed
The EC will develop sustainable financing criteria for the mining and extractive sectors by the end of 2021 in line with the objectives of the European Green Deal as the EU focuses on industrial projects in sustainable mining and processing that can be operational by 2025.
With Europe requiring up to 18 times more lithium by 2030 and up to 60 times more by 2050, Europe is mobilising rapidly and is expected to cover 80% of its lithium needs in the battery sector by 2025.
Infinity’s San José is a sustainable and fully integrated lithium hydroxide project that is aligned to the EU’s strategic objectives to develop an integrated lithium-ion battery supply chain in Europe.
Participants in the placement issued one attaching unlisted option for every two shares subscribed in the placement at an exercise price of 12 cents with a 24-month term - subject to shareholder approval at the annual general meeting of the company in November 2020.
Infinity is now offering an entitlement offer on equivalent terms to enable Australian investors to take part in the capital raising.
Around 31,428,571 shares and 15,714,285 unlisted options will be issued, with the issue price at A$0.07 per share.
“Building on EU momentum”
Parkin said: “Our recent funding deal with EIT InnoEnergy facilitated the commencement of phase one feasibility study test-work which will also provide for test product material being made available for customer verification.
“The support received through the placement will underpin the progression of the feasibility study that will build on the momentum in the EU which includes the recently announced new funding avenues aligned to the development of critical raw materials.
“We look forward to offering our existing shareholders the opportunity to participate in the capital raising through the entitlement offer.”