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Jindalee secure up to $6.7 Million to advance McDermitt Lithium Project

4 July 2024 12:22
ASX:JLL

Jindalee Lithium Limited (ASX:JLL) has announced a major funding initiative aimed at advancing its McDermitt Lithium Project, which hosts the largest lithium deposit in the USA. The company seeks to raise up to $6.7 million, with firm commitments of $4.1 million already in place.

Funding Breakdown

The capital raise consists of three main components. A placement of approximately $0.6 million from institutional investors, directors, and management at $0.30 per share, including commitments from Mercer Street Global Opportunity Fund II, LP, and other funds managed by C/M Capital Partners, LP.

A non-renounceable rights issue offering existing shareholders the opportunity to buy shares on a 1 for 6 basis at $0.30 per share with attaching options, aiming to raise approximately $3.1 million.

Lastly, a funding facility of up to $12 million, starting with an initial tranche of $3.0 million and potential additional funding of up to $9 million for convertible notes.

Utilisation of Funds

The raised funds will be allocated to several key areas. They will aid the completion of the McDermitt Pre-Feasibility Study (PFS) including new value optimisation opportunities to improve capital intensity, operating costs, and production outcomes.

Currently, McDermitt stands as the largest lithium deposit in the USA in terms of contained lithium within its Mineral Resource, representing a globally significant resource poised to supply lithium carbonate equivalent (LCE) to US supply chains for decades.

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Table 1: Summary of 2023 McDermitt Mineral Resource Estimate at the reporting cut-off of 1,000ppm.

The funds will also assist in continuing US activities including baseline studies, permitting, stakeholder engagement, covering corporate costs and general working capital.

Jindalee has continued to progress McDermitt throughout 2024, with the capital raise to allow the Company to execute on several potential value catalysts in the second half of CY2024.

These include tribal agreements (Q3), US Government technical cooperation agreement (Q3), production of battery grade lithium carbonate (Q3), update on POSCO test work in Korea (Q3), completion of optimised McDermitt PFS (Q4), potential US Government grant funding (Q3/4), and the commencement of strategic partnership and investment process (Q4).

Management comments

Jindalee’s CEO Ian Rodger expressed optimism about the funding and the future of the McDermitt Project. “We are very pleased to have secured the support of Mercer Street as a long-term funding partner, alongside the continued backing of our existing shareholders.

“This funding will enable us to deliver several key value catalysts in the second half of 2024, including the optimised McDermitt PFS and a potential award decision for US Government grant funding.”

Mercer Street’s Managing Partner Jonathan Juchno also shared the positive outlook. “Mercer Street is pleased to support Jindalee Lithium. We see a significant value disconnect between Jindalee’s current market valuation and the strategic potential of the McDermitt Lithium Project.

“With strong long-term prospects for the lithium market as the US builds out its battery value chain, we are confident in the Jindalee team’s ability to advance the Project through key milestones expected in the coming months.”

JLL’s Australian Security Exchange-listed share price is currently trading at $0.30 (12:00 pm UTC+ 8 hours)

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