Patagonia Lithium Ltd Announces $2.15 Million Capital Raising for Exploration Projects in Brazil and Argentina
PL3 (PL3) Share Update July 2024 Tuesday 9th
Patagonia Lithium Announces Capital Raising to Boost Exploration Efforts
Patagonia Lithium Ltd (ASX:PL3) has announced a significant capital raising initiative aimed at funding its exploration projects in Brazil and Argentina. The company plans to raise up to $2.15 million through a convertible note issue and a non-renounceable entitlement offer to eligible shareholders.
Instant Summary:
- Patagonia Lithium Ltd to raise $2.15 million at a 5.9% premium.
- Executive Chairman Phil Thomas commits $150,000 and his full entitlement of $34,000.
- Significant shareholder Southeast Mingqing Supply Chain Co Ltd commits to full entitlement and up to $1.5 million additional.
- Copeak Pty Ltd leads the round with $400,000 firm commitments.
- Funds to be used for exploration in Argentina and Brazil and working capital.
Capital Raising Details
Patagonia Lithium Ltd (ASX:PL3) has announced its intention to undertake a convertible note issue followed by a non-renounceable entitlement offer to eligible shareholders, aiming to raise up to $2.15 million. This capital raising is set at a 5.9% premium to the previous closing price.
Executive Chairman Phil Thomas has shown confidence in the initiative by committing $150,000 and taking up his full entitlement of $34,000. The issuance of convertible notes to him is subject to shareholder approval and will be provided by way of an unsecured loan.
Shareholder Commitments
Significant shareholder Southeast Mingqing Supply Chain (Fuyang) Co Ltd has committed to subscribing for its full entitlement under the entitlement offer and up to an additional $1.5 million under the entitlement offer shortfall, pending Overseas Direct Investment Approval.
Leading Melbourne boutique Copeak Pty Ltd has confirmed firm commitments to raise $400,000 through the issuance of convertible note deeds. These notes will convert at a price of $0.09, with a 10% coupon rate and a 6-month term if not converted. Conversion includes the issuance of options on a 1-for-2 basis, exercisable at $0.15 and expiring on 31 August 2025.
Entitlement Offer
The company will also undertake a non-underwritten and non-renounceable entitlement offer to eligible shareholders of one new share for every three existing shares held. The issue price is set at A$0.09 per new share, aiming to raise A$1.75 million if fully subscribed. Successful applicants will receive one attaching option for every two new shares acquired, exercisable at A$0.15 and expiring on 31 August 2025.
Use of Funds
The proceeds from the entitlement offer and convertible notes will be used to complete the current drill program in Argentina, prepare an updated Mineral Resource Estimate, drive its Brazilian exploration program, and for working capital.
This capital raising initiative is a positive step for Patagonia Lithium Ltd, reflecting strong confidence from both the company's leadership and significant shareholders. The funds will enable the company to advance its exploration projects in Argentina and Brazil, which could lead to significant mineral discoveries. This could positively impact the company's stock price as investors anticipate potential growth from successful exploration results.
Investor Reaction:
Investors and analysts have reacted positively to the announcement, noting the strong commitments from key shareholders and the leadership's confidence in the company's prospects. The premium pricing of the capital raising is seen as a sign of strength and potential future growth.
Conclusion:
Investors should keep an eye on Patagonia Lithium Ltd's progress in its exploration projects and the upcoming drill results. The successful completion of the capital raising and positive exploration outcomes could significantly enhance the company's value. Subscribing to the entitlement offer could be a strategic move for investors looking to capitalize on potential growth.