Here’s why Core Lithium (ASX:CXO) is in news today

Highlights: 

• Core Lithium has undertaken a capital raise with institutional placement to raise AU$100 million. 
• The company will place around 97.1 million new ordinary shares at an offer price of AU$1.03 per share as a part of this capital raise.
• Therefore, the company requested ASX to put its shares under trading halt from today until Tuesday (4 October 2022).

Australian lithium miner Core Lithium Ltd (ASX:CXO) has placed its shares under trading halt since today (30 September 2022). The company is expecting normal trading to begin on ASX on 4 October 2022, Tuesday. 

Meanwhile, Core Lithium shared that it would undertake material capital raising, including an institutional placement. The company will undertake a fully underwritten placement of 97.1 million new fully paid ordinary shares to raise AU$100 million. Core has set the offer price to AU$1.03 per share of the company, representing a discount of 6.8% on the last closing price of the company on ASX.  

Shares of Core Lithium were spotted trading last at AU$1.105 per share on ASX as of Thursday (29 September 2022).

Details of Core Lithium’s capital raising: 

Followed by successful exploration projects and favourable lithium prices, Core Lithium mentioned in its update that the company is currently seeking ‘new and aggressive’ mining opportunities that will enable rapid growth in ore reserves and mineral resources through drilling projects at Finniss Lithium Project.

Core also believes that the placement of new shares to raise capital will help the company to maintain a strong balance sheet during the construction and ramp-up phases. Furthermore, capital raising is also supposed to increase the company’s financial flexibility to allow it to seek opportunities in future.

On the other hand, Core also revealed that development activities at the Finniss project are progressing as planned, and the company is to deliver its first lithium concentrate production in H1 FY2023.

How will Core Lithium utilise the raised fund: 

Image source: © Viruswin32 | Megapixl.com

Core Lithium will utilise the raised fund in the following ways: 

• Core Lithium said that it will use around AU$25 million to accelerate resource definition, extensional and exploration drilling at the Finniss Project during the calendar year 2023.
• The raised capital will be used to advance the development of the proposed BP33 underground mine by investment in early works.
• Core Lithium will also use the raised fund to introduce a night shift to accelerate the commissioning of the Finniss concentrator.
• A portion of the raised capital will also go towards the enhancement of Core’s project management and corporate development capabilities.
• The company will also spend the raised capital on working capital during the completion of construction and ramp-up.

Gareth Manderson, Chief Executive Officer, Core Lithium, said: