Lithium producer Altura Mining has entered a trading halt, with a plan to raise about $30 million for working capital, a day after it reported production at its Pilgangoora processing plant was improving.
Lithium producer Altura Mining has entered a trading halt, with a plan to raise about $30 million for working capital, a day after it reported production at its Pilgangoora processing plant was improving.
Business News understands most of the cash will be raised through a placement, with a purchase plan also available to shareholders.
The raising will be managed by Jett Capital, at 13 cents per share, a discount from the share price at the halt of 14.5 cents.
It will be the second fund raising in less than six months.
The company secured $US15 million of additional debt funding in September to support commissioning and ramp-up to nameplate capacity.
Altura has been working to lift output at the Pilgangoora mine, which started production in the middle of 2018, after suffering issues with the mine’s floatation plant and needing downtime for modifications.
A recent update reported that the plant had delivered output at 70 per cent of capacity for several continuous 24 hour periods.
Yesterday, the company’s quarterly statement said the plant was producing 12,000 tonnes a month, with capacity of roughly 18,000.
Contractor Primero Group was continuing to work on getting the plant up to nameplate.
“The floatation plant has provided the commissioning team with the main operational challenge to bring on-line in the last quarter,” the quarterly said.
“Initial wet commissioning occured in November, with selected production runs being completed in December 2018.
“Considerable downtime in the plant was attributable to the performance of the ball mill and tailings thickener which required several days of downtime during the month.
“Subsequent rectification on the units has produced positive results.”
Altura’s biggest shareholder, Chinese manufacturer Shaanxi J&R Optimum, has had ongoing problems in the past year.
Shaanxi also has an offtake deal for about 50,000 tonnes per annum of lithium, renegotiated down last year from 100,000 tonnes.
Business News understands Altura is exploring finding a party to take that offtake commitment and confident it can lock something in.
One of Shaanxi’s creditors has put in an application to Chinese courts for the company to be reorganised, according to a release on the Shenzhen stock exchange.
Shaanxi is hunting for strategic investors, and updated the market yesterday.
“The company still faces a large debt repayment risk,” it said in the release (note this is translated from mandarin).
“If the debt restructuring work cannot be completed successfully, it has an adverse impact on the company's introduction of strategic investors, which may lead to (it) being impossible.”
