The Piedmont Lithium Ltd (ASX: PLL) share price is edging lower on Thursday after returning from its trading halt.
At the time of writing the Piedmont Lithium share price is down 2% to 41.2 cents.
Image source: Getty Images
Why was Piedmont Lithium in a trading halt?
This morning the US-based lithium miner's shares returned to trade after completing an underwritten US public offering.
According to the release, the company has issued 2 million American Depositary Shares (ADSs), at an issue price of US$25.00 per ADS, to raise gross proceeds of US$50 million (A$70.6 million).
Each ADS represents 100 of the company's ordinary shares that are listed on the Australian share market. On a per share basis, this represents a price of 35.3 Australian cents per share, which is a 16% discount to its last close price.
In addition to this, the company has granted the underwriters a 30-day option to purchase up to an additional 300,000 ADSs at the issue price of the offering.
Management advised that the proceeds of the offering will be used to continue the development of its Piedmont Lithium Project. This includes a definitive feasibility study, testwork, permitting, further exploration drilling, and general corporate purposes.
What's next for Piedmont Lithium?
Now the company has raised its funds, it can start to focus on getting its operation ready to supply material to electric vehicle giant, Tesla.
Last last month the company announced that it had signed a binding sales agreement with Tesla for an initial five-year term for the supply of spodumene concentrate (SC6) from its North Carolina deposit. The deal also includes the option to extend it for a further five years by mutual agreement.
Piedmont and Tesla have agreed a fixed commitment which represents approximately one-third of the lithium miner's planned SC6 production of 160,000 tonnes per annum. It also includes an option for additional SC6 upon Tesla's request. Deliveries are expected to commence between July 2022 and July 2023.
