LPI and its Chilean partners Minera Sala Blanco and Minera Li have sold the tenements that made up the Maricunga project into a new entity to be jointly owned by the three companies.
A Chilean LPI subsidiary will take a 50% stake in the new entity, while MSB will hold 32.3% and MLi will hold 17.7%.
LPI will provide the new subsidiary with initial capital of $US8.4 million, funded from cash reserves and the capital raising, comprising a $3.9 million loan to fast-track a drilling program and a subsequent payment of $4.5 million to cover other operational expenses.
The loan will help to fast-track a current lithium resource drilling program at Maricunga, while additional funds will be used to drill 16 exploration wells and two pumping test wells, as well as construction of lithium carbonate and potash pilot plants.
A final earn-in payment of $13.6 million will be made in stages from November 2017 until December 2018 to fund a full definitive feasibility study and an environmental impact assessment.
LPI Chile will also acquire from MSB options over tenements which it does not currently hold through the issue of 16 million of the parent company’s Australian Securities Exchange-listed shares, subject to shareholder approval.
LPI will exercise the option rights after review and due diligence, with the exercise price to be roughly $5.2 million.
The Australian company plans to issue 31.6 million shares at A38c each to raise $12 million from sophisticated investors, with another $2 million to be raised through an SPP targeting existing shareholders.
Together with the 16 million shares issued to MSB, this will constitute 22% of LPI’s future total issued capital.
LPI chief executive Martin Holland said the consolidation of the two tenement packages at Maricunga was an important step in the future development of the project.
“We are delighted at the outcome of the company’s successful capital raising,” he said.
“We look forward to reporting the results of the exploration program as they become available during Q4 2016, leading to a new JORC resource statement and lithium pilot plant construction in 2017.”
Shares in LPI were down 15.05% or 7c in early trade to 39.5c.
