The Latin Resources Ltd (ASX: LRS) share price has come out of a trading halt on Thursday to reach a near multi-year high.
This comes after the lithium explorer announced an update on its recent capital raise.
At the time of writing, Latin Resources shares are up 2.70% to 19 cents a pop. It's worth noting that the shares hit an intraday high of 20.5 cents before retracing during this morning's trade.
Latin Resources completes placement
ASX investors are buying up Latin Resources shares today as the company seeks to progress its lithium business in Brazil.
According to its release, Latin Resources has received firm commitments to raise $35 million through a share placement.
The offer was presented to institutional and sophisticated investors at an issue price of 16 cents per share.
The company highlighted that it had strong support from Canadian cornerstone investor Electrification and Decarbonization AIE LP Fund (E&D Fund). A wholly-owned subsidiary of Toronto-based Waratah Capital Advisers, the E&D Fund invested a total of $15 million.
Latin Resources will use its existing placement capacity to create new shares for the institutional and sophisticated investors. Under listing rule 7.1, this allows up to 15% of its total shares to be issued without shareholder approval (74,478,284 shares and 109,375,000 options).
The company will use an extension to the listing rule (7.1A) to issue the remaining shares (144,271,716 shares) and 11 million options associated with Waratah's investment. However, the latter will need shareholder approval at a general meeting to be held late next month.
Latin Resources will primarily use the proceeds to accelerate its Bananal Valley drilling program at the Salinas Lithium Project in Brazil. In particular, the funds will be allocated to the following:
- An aggressive resource definition program for the Bananal Valley prospect within the Salinas Lithium Project
- Exploration drilling at the Monte Alto and Salinas South lithium prospects in Brazil
- A Pre-Feasibility Study, a Direct Shipping Ore Study and metallurgical test work in respect of the Cloud Nine Halloysite-Kaolin Deposit in Western Australia, as well as regional exploration at the broader Noombenberry Project area
- Initial exploration drilling at the MT-03 Copper Project in Peru
- Working capital.
What did management say?
Latin Resources managing director Chris Gale commented:
Our results at Salinas have been exceptional, revealing we have some very high-grade lithium spodumene mineralisation.
We consider that winning the support of a technical-focused group, like Waratah's E&D fund, who are very well-versed on the lithium sector, is a big tick of approval for what we are doing and where we are headed with our Salinas Lithium Project.
What's really exciting is the roadmap ahead for LRS shareholders. We are relatively early in the discovery phase of our Salinas Lithium Project, and we have much work ahead of us, however the level of attention we are receiving from industry players suggests we are not alone in thinking that Latin has a chance to develop a highly valuable lithium project in Brazil.
About the Latin Resources share price
Latin Resources shares have gained about 290% in value over the past 12 months. The company's share price reached a 52-week high of 22.8 cents on 6 April.
Latin Resources presides a market capitalisation of $305.10 million with 1.64 billion shares outstanding.
