The Global Lithium Resources Ltd (ASX: GL1) share price took off today following a company update on its recent equity raise.
At Monday's closing bell, the lithium explorer's shares finished the day 34.02% higher to 65 cents a pop.
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Global Lithium completes placement
In its release, Global Lithium advised it had received firm commitments for its strategic placement to raise $13.6 million.
The company highlighted strong support from a major lithium industry player, Yibin Tianyi. The lithium chemical arm of Contemporary Amperex Technology Co (CATL) invested $6.2 million for a 9.9% interest in Global Lithium. CATL is arguably the world's biggest electric vehicle producer.
The remaining amount ($7.3 million) came from an array of institutional and sophisticated investors.
The offer will see approximately 36.88 million new ordinary shares issued at a price of 37 cents each. This represents around a 31% discount to the last closing price of 48.5 cents on 28 October (before going into a trading halt).
Global Lithium will use its existing placement capacity to create the new shares for institutional and sophisticated investors. Under listing rule 7.1, this allows up to 15% of its total shares to be issued without shareholder approval.
Furthermore, the company will seek shareholder approval at its annual general meeting (AGM) in December for the Yibin Tianyi placement.
The directors of Global Lithium have also taken up the decision to participate in the capital raise. This too will be subject to shareholders giving the nod at the AGM.
What's the money for?
The company will primarily use the proceeds to accelerate lithium exploration at the Marble Bar Lithium Project (MBLP). In particular, the funds will be allocated to the following:
- Further lithium resource extension, targeting and regional exploration drilling
- Initial exploration drilling along the southern extension of the greenstone belt
- Further exploration at the company's under-explored gold prospects, including the Twin Veins project
- Completion of preliminary metallurgical test work program; and
- Pursue potential growth opportunities.
Global Lithium managing director, Jamie Wright commented:
To be able to secure support from a lithium industry participant with the credibility of Yibin Tianyi is a strong vote of confidence in our Company and we look forward to developing our relationship with them over time.
The capital raising funds provide us with the ability to ramp up our activities on site as we seek to grow our project and we are looking forward to a busy 2022 period.
Drilling is continuing at our MBLP and we will update the market as we start to receive results.
About the Global Lithium share price
Adding to today's rise, Global Lithium shares have gained around 225% since listing on the ASX in May. The company's share price reached an all-time high of 69 cents today.
Based on valuation grounds, Global Lithium presides a market capitalisation of roughly $57.83 million, with over 88.9 million shares outstanding.
