Delta Lithium (ASX:DLI) is undertaking a fully underwritten accelerated non-renounceable entitlement offer on the basis of 2 shares for every 7 existing shares to raise about $70.2 million.
The company has entered into an underwriting agreement with Mineral Resources (ASX:MIN) and joint lead managers Bell Potter Securities and Canaccord Genuity (Australia) whereby MinRes has agreed to fully underwrite the offer.
Delta Lithium says MinRes and Hancock Prospecting collectively hold 22% of the company’s existing and outstanding shares and have indicated they intend to take up their full entitlement, representing about $15.4 million. All directors of Delta who are shareholders have indicated they also intend to participate.
The $277.55 million market capitalisation company says the entitlement offer will comprise the issue of some 152.5 million new fully paid ordinary shares at $0.46 per new share.
The company’s share price was yesterday (13 November 2023) trading at $0.52.
Delta’s entitlement offer represents an 11.5% discount to the last traded price, a 9.2% discount to the theoretical ex-rights price (TERP) of $0.507, and a 17% discount to the 5-day volume weighted average price of shares up to and including 10 November 2023.
An accelerated institutional component is open to eligible institutional shareholders until today (14 November) and a retail component will be open to eligible retail shareholders from 20 November to 4 December 2023 (unless extended).
The proceeds from raise will be used to rapidly develop Mt Ida through to Final Investment Decision stage. The completion of the feasibility study will also include licensing and approvals associated with mine development activities.
There will also be drill campaigns to further define the Mineral Resource Estimate in addition to the regional exploration. A camp upgrade is being conducted currently with a road and water infrastructure upgrade planned.
Write to Adam Orlando at Mining.com.au
Images: Delta Lithium
