Battery Boom Provides Impetus; Alliance Mineral Raises Capital for Bald Hill Mine

Alliance Mineral Assets Limited (ASX: A40), an Australian Securities Exchange listed lithium explorer, announced on 16th May 2019, that the company entered into a separate subscription agreement with Galaxy Resources Limited (ASX: GXY), and with a wholly-owned subsidiary of Jiangxi Special Electric Motor Co., Ltd on 15th May 2019.

The company entered an institutional and conditional placement to raise total gross proceeds of A$32.5 million, and for that purpose, Alliance Mineral entered an Institutional Placement with Galaxy Resources to raise A$22.5 million at an offer price of A$0.20 per share on a conditional basis.

Alliance Mineral decided to enter a Conditional Placement with the wholly owned subsidiary of Jiangxi Special Electric Motor Co., Ltd- Weier Antriebe und Energietechnik GmBH, to raise a capital of A$10 million on a conditional basis.  

Both placements are planned by the company to meet the capital expenditure for continued upgrades to the processing facilities at its Bald Hill Lithium and Tantalum Mine in Western Australia. The company further intend to fund the future exploration and other initiatives along with working general capital requirements through the placement, at the Bald Hill Mine.

Placements:

The Institutional placement will incorporate the issue of 112,500,000 shares, while on the other hand, the Conditional Placement will mark an issue of 50,000,000 shares, and both the placements are not underwritten.

Canaccord Genuity Limited in Australia is acting as a lead manager for the placement, and the payment for the services of the lead manager will be paid by way of an issue of 6,125,000 shares at the same offer price of A$0.20 per share. However, the company mentioned that the payment for the placement is conditional upon the fulfilment of the issue, and no payment or fee will be payable if any part of the placement does not complete.

Conditions:

Alliance Mineral mentioned that the placement and the issue of the fees related to it, is subjective to the approval from SGX-ST (LQN) for the listing of, and quotation for, the Placement Shares and the fee on the Catalist Board of the SGX-ST by 14th June 2019.

The approval date remains intact unless a later date is agreed by the trio of companies involved in the agreement decides otherwise, and Alliance Mineral would be making an application to the SGX-ST for the LQN through its sponsors.

Since Jiangte is a substantial shareholder of the company, under the Catalist Rule 812(2) and 805(1), the conditional placement is also subject to the approval of the shareholders.

Alliance Mineral mentioned that the Institutional Placement and Fee associated with it would be issued under the pursuant 15% placement capacity of the company, as per the ASX Listing Rule 7.1 and the Conditional Placement will also seek the shareholders’ approval.

Battery Market Outlook:

The battery market is currently noticing a surge amid high demand from the electric vehicle segment and global stance to curb the environmental pollution in line with Euro 6 emission standard.

Lithium as a potential source for battery construction and electricity storage capabilities make it a metal of high demand, and global players are trying to ramp up the production to take advantage of high prices of the commodity in the international market.

By the end of the trading session, the shares of the Alliance Mineral were at A$0.220 (as on 16th May 2019), up by 10% as compared to its previous close.


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