This article is 7 years old. Images might not display.
The company plans to issue up to 220 million shares at 35c apiece, a 10.9% discount to the five-day volume-weighted average price, to institutional and sophisticated investors to raise $50 million.
Major shareholder Mineral Resources plans to participate in the offer.
A previously announced US$20 million placement to offtake partner Ganfeng Lithium will also be completed.
The placement will be conducted in two tranches, with the second tranche of A$10.5 million requiring shareholder approval, which will be sought at a meeting in late July.
Pilbara will also conduct a share purchase plan at the same price to raise up to $15 million.
It is proposed that up to 262.9 million shares will be issued to raise a total of up to $92 million.
Earlier this week, Pilbara raised US$100 million via the issue of five-year senior secured bonds carrying a 12% coupon rate.
When combined with existing cash of A$51 million, a previously announced $18 million investment from offtake partner General Lithium, the bond issue and raising will give Pilbara available cash of $293 million.
Early works have been underway at Pilgangoora since November and remaining capital costs are $207 million.
Pilbara plans to use $16 million for corporate and exploration, $16 million for interest costs, $19 million for funding costs and working capital, and retain $35 million for management and liquidity reserves.
Pilgangoora remains on track for commissioning in the first quarter of 2018, subject to a final investment decision, which is expected any day now.
Long-lead items will start to arrive on site from July for the start of plant construction.
Average annual production over Pilgangoora’s 36-year life is set to be 314,000 tonnes of 6% spodumene concentrate and 321,000 pounds of tantalite at cash operating costs of US$196 per tonne CFR in the first 15 years, and $207/t over the life of the mine.
Under the base case 2Mtpa production rate and assuming an average sales price of $537/t, Pilgangoora has a post-tax net present value of A$709 million, at a 10% discount rate, with a 2.7-year payback period and internal rate of return of 38.1%.
More recently, Galaxy Resources has settled 2017 contracts at a price of US$905/t of spodumene.
The company will also considering doubling production early in the project life, with capital costs estimated at $128 million.
Pilbara shares last traded at 37.5c, but will remain in a trading halt until Monday while the placement is being completed.
