High flying lithium explorer Latin Resources (ASX: LRS) has successfully raised $35m to ‘rapidly accelerate’ drilling at the Salinas Project in Brazil.
Several positive drilling and assay results, which confirmed high-grade lithium pegmatites at Salinas, has bolstered the company's share price up more than 400% since February.
$35m raised at 16c per share
13.5% discount to last traded price on Monday, 11 April
Represents circa 15% of company’s shares on issue (as at 31 December 2021)
Placement supported by cornerstone investment of $15m by Electrification and Decarbonisation AIE LP Fund
LRS views the investment from a highly experienced lithium fund as a “strong vote of confidence in the Salinas Project”
LRS plans for a more aggressive drilling to fast-track mineral resource definition, particularly around the Bananal Valley prospect within the Salinas Lithium Project.
The company hopes to declare a maiden JORC resource later this year.
To support more drilling activities, LRS is planning to secure an additional two drilling rigs, taking the total fleet to four rigs.
Funds will also be used to support:
Key feasibility studies (Pre-Feasibility and Direct Shipping Ore Study) for the Cloud Nine Halloysite-Kaolin Deposit in WA
Initial exploration drilling at the MT-03 Copper Project in Peru
Its difficult to gauge how a bullish stock will perform post-raise.
Adding some 200m more shares onto the market at a 13.5% discount more often than not weighs on a stock's near-term performance.
The broader lithium sector is also cooling off after a massive run up in the past few weeks, which could further hinder LRS' upside.
That said, the company intends to accelerate its exploration activities, which could improve news flow for things like assay results.
On 11 April, LRS received "more outstanding assay results" which confirm high-grade continuity and increasing thickness of lithium pegmatites.
Within the announcement, the company said it will continue to receive and update the market with assay results from completed drilling over the coming weeks as they become available.
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