The company said proceeds are earmarked for resource drilling at the Donner Lake lithium project in Manitoba and for exploration at Donner Lake and the Falcon West lithium property, which is also located in Manitoba.
The financing will consist of up to 30 million special flow-through common shares to be sold by way of a charitable flow-through offering for 18 cents each.
The company said approximately 20 million shares of the financing will be purchased by two current institutional shareholders (Waratah Capital Advisors and AMCI Group. Closing is expected to occur by December 21, 2023.
The Donner Lake property is located in the Winnipeg River pegmatite field, which hosts the world-class Tanco pegmatite.
The property is held 75% by Grid Metals and 25% by Lithium Royalty Corp (LRC). LRC has an overriding 2% royalty on the property, which Grid acquired in 2016 from Tantalum Mining Corp. of Canada Ltd. (Tanco). Tanco has the first right to acquire products produced from the property at commercial terms and holds a 2% royalty on certain claims.
Donner Lake contains a NI 43-101-compliant resource of 6.81 million tonnes of grade 1.39% Li20 in the inferred category. The estimate consists of 2.10 million tonnes of open pit resources, and 4.71 million tonnes of below pit underground resources.
Grid announced a binding lease agreement with 1911 Gold Corp. [TSXV-AUBM, OTC-AUMBF] to use its nearby True North mill for the production of lithium spodumene concentrate back in July, 2023. The mill is located 85 kilometres by road from the Donner Lake property.
The Falcon West lithium project is 100% owned by Grid Metals and covers 61,200 hectares with 70 kilometres of strike length along a highly prospective contact zone. Lithium-bearing pegmatites on the property are hosted in mafic volcanic rock units at the contact between the Wabigon and Winnipeg River geological subprovinces, which also host other lithium showings along strike.
Grid Metals shares were unchanged at 10.5 cents, Wednesday. The shares are currently trading in a 52-week range of 24.5 cents and 10 cents.
“This financing will enable both the planned resource drilling at Donner Lake and exploration on exciting new targets we have developed at Donner Lake and Falcon West,’’ said Grid Metals CEO Robin Dunbar.
“We view the recent announcements of a maiden NI-43-101 resource and our True North mill lease agreement as important milestones in our ongoing push towards production at Donner Lake – and on a condensed timeline compared to other peer projects in other parts of Canada,’’ he said. “This financing will allow us to continue to advance the project on an uninterrupted timeline.’’