Lepidico: Forges Galaxy Relationship
Edison | Oct 13, 2017 08:21AM ET
On 10 October, Lepidico Ltd. (AX:LPD) announced that Galaxy Resources had agreed to subscribe for a 12% strategic shareholding in Lepidico via a private placement of 291.8m shares at a price of A$0.01/share to raise A$2.9m. At the same time, LPD is also offering existing shareholders the opportunity to invest alongside Galaxy on the same financial terms, via a 1-for-6 partially underwritten renounceable entitlement offer (effectively a rights issue) at A$0.01/share to raise up to an additional c A$4m. Total gross proceeds of up to A$7.0m will be used to fund LPD’s Phase 1 L-Max full feasibility study through to final investment decision as well as advancing Lepidico’s resource development and exploration activities.
Partnering with a global lithium major
Galaxy (AX:GXY) is an international lithium company, listed in Australia, with a market capitalization of A$1,271m. It owns and operates the James Bay lithium pegmatite project in Quebec and the Mt Cattlin mine at Ravensthorpe in Western Australia, which is currently producing a spodumene and tantalum concentrate. It is also advancing plans to develop the Sal de Vida lithium and potash brine project in the lithium triangle in Argentina (whence 60% of global lithium production is currently sourced). As such, it has been described as the biggest of the non-Big 3 lithium producers. Given its existing contacts and relationships, Galaxy will assist Lepidico with future business and growth opportunities, including evaluating potential synergies with its Mt Cattlin mine and James Bay projects, as well as accessing additional mica feedstock sources for processing via L-Max. In addition to its initial investment, Galaxy has stated that it intends to take up all of its rights in the Entitlement Offer. It will also nominate a representative to LPD’s board.
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