Lithium Universe (ASX: LU7) announces AU$3M capital raise to advance QLPH strategy - Kalkine Media

Highlights

• A share purchase plan has been announced at an issue price AU$0.02 per share to raise up to AU$3 million.
• The funds will be used to progress engineering studies for the construction of a lithium concentrator and lithium refinery facility in Canada.
• The company aims to seize opportunities amidst the lithium downstream conversion gap in North America.

Lithium Universe Limited (ASX: LU7) has launched a capital raising program of up to AU$3 million through a share purchase plan (SPP).

The funds raised will support the advancement of LU7’s Québec Lithium Processing Hub (QLPH) strategy, which involves constructing a lithium concentrator and lithium refinery facility in Canada, playing a significant role in meeting the demand for critical battery materials in the North American market.

Data source: Company update

Proceeds to fund QLPH strategy

Shareholders recorded on the share register of LU7 at close of 12 March 2024 are eligible to participate in the SPP. The shareholders can purchase up to AU$30,000 shares under the SPP,.

The issue price of SPP is AU$0.02 apiece, representing a discount of 0.09% to the last closing price of AU$0.022 apiece on 12 March and a discount of 9.09% to the 5-day VWAP before the announcement.

The funds will be directed towards advancing the engineering studies for designing the standalone, 1Mt per annum multi-purpose spodumene concentrator, proposed in Québec, Canada. Moreover, the proceeds will be used to design a 16kt per annum, multi-purpose battery-grade lithium carbonate refinery, to be located in Bécancour, Canada.

Advancements towards achieving business objective

Since re-listing on ASX in August 2023, the company has made considerable progress towards achieving its objectives, which include –

• Initiating exploration activities at the Apollo project, James Bay, the flagship project of LU7.
• Engaging engineering firm Hatch Ltd for designing a lithium refinery and Primero Group Limited for designing a lithium concentrator plant.
• Making substantial progress in the feasibility studies for the concentrator and lithium refinery.
• Advancing the downstream converter strategy in Canada.
• Executing an option agreement to purchase an industrial site in Bécancour, Québec.

Opportunities in the North American market

The company highlighted that ~900 gigawatts of cathode/battery projects are being considered in North America.

In these projects, major players such as Tesla, Northvolt, POSCO, Ford, Toyota, and others are involved. The projects would create significant demand for lithium chemicals, approximately 800,000 tons per annum (tpa).

Acknowledging the gap in lithium processing, LU7 is eyeing to meet this demand. The company's innovative QLPH strategy targets the conversion of spodumene offtake for multinational corporations, streamlining the conversion process nearer to their supply chains in North America, rather than solely depending on China. Additionally, it is anticipated that any run-of-mine ore produced by the company's mineral assets in Canada would contribute to the spodumene mix feeding the QLPH in the future.

LU7 shares traded at AU$0.021 apiece at the time of writing on 15 March 2024.