ASX lithium share Leo Lithium Ltd (ASX: LLL) is soaring higher today, up 13.8% in early trade.
Shares in the S&P/ASX 300 Index (ASX: XKO) lithium stock closed Friday trading for 72.5 cents. In early trade on Monday, shares are swapping hands for 82.5 cents apiece.
Here's what's sending the ASX lithium miner skywards today.
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What's spurring ASX investor interest today?
The Leo Lithium share price is taking off after the ASX lithium share reported it has entered into a strategic placement and cooperation agreement with Ganfeng Lithium.
Ganfeng is the largest lithium producer in China.
Part of the cooperation agreement includes a commitment to increase the capacity at Leo Lithium's Goulamina project in Mali to one million tonnes per year. Leo Lithium has also developed a framework with Ganfeng to cooperate on a downstream conversion facility.
As for the strategic placement to Ganfeng, this will raise $106.1 million for the ASX lithium share from the issue of 131 million new shares for an offer price of 81 cents per share. That's 11.7% higher than Friday's closing price.
The miner will use the capital from the placement to ensure it is fully funded for its share of the Goulamina Stage 1 development and any operational ramp-up costs that may ensue.
Leo Lithium managing director Simon Hay called the agreement with Ganfeng "a transformational opportunity for Leo Lithium and provide[s] further validation of the tier-1 quality of Goulamina, including the significant potential upside of our development pathway".
Commenting on the proposed additional tolling arrangements with Ganfeng, Hay added:
The proposed tolling arrangement with Ganfeng provides Leo Lithium with a highly beneficial, low-risk solution to gain exposure to lithium hydroxide production and the attractive margins that are available from moving further downstream.
Ganfeng has long operated a number of conversion facilities in China and is already producing a large volume of high-quality battery grade product…
The placement remains subject to the granting of regulatory approvals in China, as well as the execution of a binding cooperation agreement.
How has this ASX lithium share been performing?
Leo Lithium is a newcomer to the ASX, having listed less than a year ago, on 23 June 2022.
So far in 2023, the ASX lithium share has gained 68%.
