ASX-listed Anson Resources will raise A$50-million in a share placement to global institutional investors to accelerate the development of the Paradox lithium project, in Utah.
The company on Friday said it had received firm commitments for the placement of some 139-million shares, at a price of 36c each under its existing placement capacity. The offer price represented a 15.3% discount to Anson’s last closing price on September 14, and a 3.9% discount to the company’s ten-day volume weighted average share price.
“The result of the capital raise is an outstanding endorsement of the Paradox Lithium Project and for ‘made in USA’ battery grade lithium carbonate. We were delighted to price the Placement at a tight discount to the prevailing volume weighted average price, despite immediately following a significant market downward correction,” said Anson executive chairperson Bruce Richardson.
“Interest in the placement far exceeded Anson’s requirements, with Anson upsizing to A$50-million to facilitate access to the register for quality investors. The post placement register provides a strong shareholder base upon which to progress the next phase of the project’s development.
“The funds raised will allow for expanded project development workstreams and accelerate Anson toward a final investment decision on the project.”
A recently completed definitive feasibility study estimated that the Paradox project would require a capital investment of $495-million. Phase 1 of the project could produce some 13 074 t/y of high purity lithium carbonate, delivering revenues of some $5.05-billion over its 23 years of operation.
C1 operating costs have been estimated at $4 368/t of lithium carbonate, with average annual earnings before interest, tax, depreciation and amortisation estimated at $153-million.
The study estimated that the Phase 1 project would have a post-tax net present value of $922-million and an internal rate of return of 37%, with a post-commissioning pay-back period of two years.
Phase 2 development at Paradox will comprise further substantial increase in lithium production capacity, together with Bromine production capacity. Phase 2 capital costs proposed to be fully funded from free cash flow generated from Phase 1 operations.