Battery and critical metals explorer and developer Pan Asia Metals (ASX:PAM) has received firm commitments to raise $1.265 million through a placement to support its lithium operations in Southeast Asia.
Under the placement, the company will issue 5.06 million shares at $0.25 per share to private investors.
The $0.025 issue price is a 4% premium to Pan Asia’s volume-weighted average price (VWAP), and a 9% premium to its last closing price, which the company says reflects the quality of its assets and its underlying ‘low-cost’ mid-stream processing strategy.
Shares in Pan Asia Metals spiked have spiked 15.22% to $0.26 as of 1:15pm AEST.
The placement included participation by the company’s Chairman and Managing Director, Paul Lock, who subscribed for $500,000 worth of shares.
Of this amount, $400,000 was provided to the company prior to, and in anticipation of the placement. Shares to be issued to Lock are subject to shareholder approval at an extraordinary general meeting (EGM).
The $35.82 million market capitalisation company reports this placement follows a memorandum of understanding (MoU) inked on 31 July 2023 with PTT Public Company’s (BKK:PTT) integrated petrochemical and refiner arm, IRPC Public Company (BKK:IRPC), to potentially develop a lithium-ion chemical supply chain in Thailand.
Also, on 28 July 2023, Pan Asia entered 5 separate MoUs with Rajo Partnerships and Thomas Eggers to acquire the Tama-Atacama Brine-Clay Lithium Project in Chile, which covers about 1,400km-square of the Tarapaca and Antofagasta regions of the Atacama Desert.
Commenting on the placement, Lock says the MoU signed with IRPC endorses the company’s concentrate-to-cathode active material (CAM) initiative in Southeast Asia, while the Tama-Atacama acquisition positions Pan Asia with one of the most ‘strategic’ lithium-in-brine and lithium-in-clay plays in its global peer group.
The Chairman and MD also says its MoU with VinES Energy Solutions positions Pan Asia with the potential to be one of the ‘lowest-cost’ lithium chemical producers.
“Purchasing PAM’s shares at 25 cents based on a market capitalisation of about $35 million is a no-brainer,” Lock says.
“Purchasing PAM’s shares at 25 cents based on a market capitalisation of about $35 million is a no-brainer”
Under the MoU with IRPC, both parties are establishing a joint project team to assess the viability of developing a lithium mining operation at Pan Asia’s projects in the south of Thailand to produce a lithium oxide concentrate product.
This MoU is also assessing the viability of developing a lithium conversion facility in IRPC’s Industrial Zone in the Rayong province of Thailand to produce lithium carbonate or lithium hydroxide.
Both parties are also assessing the viability of developing a CAM facility in IRPC’s Industrial Zone, potentially with a technology knowledge partner, to produce CAM products.
On 19 May, Pan Asia signed a non-binding MoU with VinES Energy Solutions, which is a member of Vietnamese conglomerate Vingroup, to evaluate a standalone lithium conversion facility close to VinES’ battery plant in Vietnam. This evaluation considered an annual capacity of between 20,000 to 25,000 tonnes per annum of lithium carbonate or hydroxide.
Pan Asia reports the shares will be issued within the company’s existing 15% placement capacity and are expected to be issued on 10 August 2023.
Pan Asia Metals’ portfolio includes the Reung Kiet and Kata Thong Lithium projects and the Khao Soon Tungsten Project in Thailand. According to its latest quarterly report published on 31 July, Pan Asia had $548,000 cash at hand as of 30 June 2023.
Write to Harry Mulholland at Mining.com.au