Specifically, Neo Lithium intends to use the majority of the financing proceeds to advance the construction of the concentration pond system at a commercial scale with a view to accelerating future production from the 3Q Project.
The Toronto company said a syndicate of underwriters has agreed to purchase, on a bought deal private placement basis 9.9 million special warrants at $3.05 each.
The special warrants will be issued under a special warrant indenture and shall entitle the holder to receive one common share of the company. The special warrants shall be deemed exercised on behalf of, and without any required action on the part of the holders on the earlier of the second business day following the date on which a final receipt is obtained from the Ontario Securities Commission or 4:59 p.m. (Toronto time) on a date which occurs four months and a day after the closing date, which is scheduled for February 10, 2021.
Neo Lithium shares declined on the news, falling almost 9% or 31 cents to $3.18 on volume of 1.54 million. The shares are currently trading in a 52-week range of $3.88 and 38 cents.
Neo Lithium is moving to establish itself as a key player in the global battery metals sector by developing one of the world’s largest lithium brine projects Argentina.
The 3Q Project is a unique high-grade lithium brine lake and salar complex, situated in Catamarca, a region known as Latin America’s “Lithium Triangle.”
A key feature of the project is an unusually low level of impurities that should allow Neo Lithium to develop a project that will rank much lower on the cost curve than other comparable operations.
The 3Q Project has already attracted the attention of Contemporary Amperex Technology Co Ltd. (CATL), a Chinese company which supplies lithium-ion phosphate batteries to electric car maker Tesla Motors Ltd. [TSLA-NASDAQ]. CATL is also supplying different types of batteries to various other carmakers including Daimler AG, and Toyota Motor Corp.
CATL is currently Neo Lithium’s third largest shareholder with an 8.0% equity stake.