Liontown to raise $7.9m

Liontown Resources has announced a $7.9 million capital raising, with the funds set to go towards project development activities at its Kathleen Valley lithium project, located 60 kilometres north of Leinster.

Under the raising, Liontown is offering a 1one-for-five non-renounceable pro-rata rights issue to raise $4.5 million.

The rights issue will be fully underwritten, with Taylor Collison and Bridge Street Capital Partners acting as the joint lead managers.

It intends to raise $3 million via a share placement to institutional and professional investors.

Subject to shareholder approval, the company is also seeking to raise $350,000 via a share placement to its directors.

The issue price of two cents per share represents a discount of 20 per cent its last closing price, on Monday.

The funds will go towards its Kathleen Valley project, including metallurgical testwork, drilling to potentially expand the mineral resource and mine life, and the commencement of a feasibility study that is targeted for completion in early 2020.

Liontown managing director David Richards said the demand for the placement exceeded funds sought to be raised.

“This funding will enable us to rapidly advance project development activities at Kathleen Valley following the recent completion of an independent scoping study which confirmed the potential to establish a commercially robust mining operation,” Mr Richards said.

“Resource expansion drilling is already in progress and we are confident that we can significantly extend the mine life from the current nine years outlined in the study.”

Liontown also has another lithium project, Buldania, which is located in the southern part of the Eastern Goldfields Province.

The company anticipates it will make a mineral resource estimate at the project this year.

Shares in Liontown closed trade at 2.1 cents each, a fall of 16 per cent.