The recent US$20 billion backing of Lake’s technology provider Lilac Solutions by Bill Gates-led fund- Breakthrough Energy demonstrated substantial investors’ confidence around Lake Resources NL (ASX: LKE). The significance can be easily gauged by the surge in the company’s share price by ~36% (day's closing) post the announcement on 21 February 2020.
Therefore, in the milieu of renewed confidence, the lithium explorer and developer company has now revealed to extend the size of its planned Private Placement (PP) by A$1.9million before costs, i.e., from A$1.5million to A$3.4million. The PP increment will lead to the issuance of 47.5million additional shares at A$0.04 per share to sophisticated and professional investors. The settlement of the issued stock is expected on Wednesday, 26 February 2020.
Post the increment; it will raise ~A$3.37million with the issue of approximately 84.02 million total placement shares. LKE is preparing and planning to issue supplementary prospectus on or around 26 February 2020 to address the matters related to PP .
Capital Raising Program – Previous Planned Detail
Hence, the earlier scheduled A$1.47million fundraise is changed to A$3.37million after the positive sign of the investors, which is likely to support the smooth commercialisation of Lake's Kachi Lithium Project.
Share Purchase Plan (SPP) – Update
The SPP received strong support with the rise in share price post the announcement of "Bill Gates-Led Fund Back's Lake's Technology Partner Lilac" on 21 February 2020. Still, the company has capacity left for SPP subscription which is scheduled to close on Friday 28 February 2020.
What Happens If the SPP Oversubscribed?
The shareholders can subscribe for new shares for up to A$30,000 worth i.e. in a batch of A$1,000, A$2,000, A$5,000, A$10,000, A$15,000, A$20,000, A$25,000 or A$30,000 at A$0.04 until the SPP Offer closes. Also, it is worth mentioning that the issue price is same as private Placement, which is at a discount of 20% to the ten-trading day volume-weighted average price (VWAP), i.e. ~A$0.05 as on day's closing of 21 February 2020, and at a 20% discount of 5 days VWAP before the date of announcing the capital raising program.
Interested in LKE’s Capital Raising Program? Deep Dive by Clicking: Lake Resources’ Capital Raising Program Update; Sailing Smoothly Toward Raising Funds
Kachi Lithium Project – Pilot Plant and PFS Update
The Lake Resources NL wholly owns Kachi Lithium Project. The company, in addition to Kachi, also owns the Cauchari Project and Olaroz project in the heart of scalable and sustainable Lithium Triangle, along with one hard rock project.
Presently, LKE, along with its technology partner Lilac, is looking forward to the production of lithium carbonate samples by Lilac Solutions’ ion-exchange pilot plant. The produced lithium carbonate is expected to be sent to the potential offtake partners to start qualification testing by the downstream groups, which may further benefit in supporting finances. Whereas, the Pre-Feasibility Study (PFS), incorporating all the details about the project, including improved design features for direct extraction plant provided by the LKE's technical contributor, is expected to demonstrate the cost-efficiency.
As the company is advancing towards scalable and sustainable lithium extraction, it is worth mentioning that the Kachi project is anticipated to be capable of charging a higher premium on its lithium carbonate due to its high quality and low impurities battery-grade product.
Positivity Around Kachi Lithium Project
Apart from being strategically located in Argentina's Lithium triangle ¾ the low-cost lithium source to the ~40% of the world, it also uses Lilac direct extraction ion-exchange which is environment-friendly and reduces emissions significantly in comparison to previous technology.
The Lilac process reinjects the brines back to the underground than traditional evaporation ponds method making it cheaper, scalable and faster.
The lab results also depicted the recovery improvement by ~80% to 90% in a few hours than conventional South America's brine operations recovery of ~50% in 9 to 18 months.
To Know More About Kachi Project, Please Read: Kachi Project - Assessing Requisites for Lake Resources’ Future Production
The optimism can also be weighed on the receival of US$20 million funds to the Lilac Solutions by the Breakthrough Energy Ventures, where the Breakthrough Energy is backed by the sustainability-focused investors ranging from Microsoft founder Bill Gates, Alibaba's Jack Ma, Amazon's Jeff Bezos and Bloomberg LP founder Michael Bloomberg.
The funding will support the commercialisation of Lilac's ion exchange technology for the direct extraction of lithium from brine resources offering a sustainable solution to the lithium brine industry.
Stock Price Information
The stock traded at A$0.042 on 24 February 2020 and has a market cap of A$28.3million. As of 21 February 2020, the stock has generated a return of 48.48%.