Lithium

Latin Resources raises $35m to fast-track drilling, eyes maiden resource later this year

Thu 14 Apr 22, 12:30pm (AEST)
Drilling - RC Drill Rig - Pilbara - Australia
Source: iStock

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Key Points

  • Latin Resources successfully raises $35m at 16c per share
  • Proceeds will be used to fund more aggressive drilling at the Salinas Project in Brazil
  • The company hopes to provide a maiden JORC resource later this year

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.

Capital raising at a glance

  • $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”

Use of funds

LRS plans for a more aggressive drilling to fast-track mineral resource definition, particularly around the Bananal Valley prospect within the Salinas Lithium Project.

2022-04-14 12 08 11-Window
Source: Latin Resources

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

Capital raise impact

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.

lrs chart
Latin Resources 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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