Lithium Africa (TSX:LAF) is targeting a financing decision in the first half of 2027 after receiving two non-binding funding offers for its Springbok Project in South Africa.
The first offer is a prepayment facility from an international commodity trading house, including 100% offtake of spodumene concentrate from Springbok for its first three years of production.
Meanwhile, the second offer is a US$60 million ($85.5 million) investment from a lithium processing company backed by a Fortune Global 500 group. The investor would take a 55% interest in a new holding company that holds Lithium Africa’s 70% stake in Namli Exploration & Mining, which owns Springbok.
The second proposal implies a pre-money valuation of US$70 million for Springbok. Lithium Africa would keep a 45% stake in the holding company — valued at US$49 million — without contributing funds, leaving it with an indirect 31.5% interest in Namli. Its Broad-Based Black Economic Empowerment (B-BBEE) partner retains 30%.
Proceeds would fund US$10 million of drilling across the Springbok district and US$50 million for a processing plant, supporting production targeted for the second half of 2027.
Both offers remain subject to due diligence, definitive agreements, board and shareholder approvals, TSX Venture Exchange acceptance, and regulatory approvals.
The company is in talks with more than 20 potential counterparties on offtake, prepayment, vendor financing, and project-level equity.
CEO Dr Thomas Benson says the offers show the strength of interest in the project.
“Receiving offers from both a major trading house and a lithium processing company shows the strength of interest in Springbok, a permitted mine with a path to production in 2027,” Benson says.
“We are running a competitive process, and our job now is to select the partner and […] structure that deliver the most value for Lithium Africa shareholders so that small-scale production at Springbok can fund large-scale exploration across the district.”
Lithium Africa is an explorer and developer building a portfolio of hard-rock lithium assets across Africa.
Write to Paula Fabe at Mining.com.au
Main image: Lithium Africa
