The Global Lithium Resources Ltd [ASX:GL1] shares are up almost 30% today after a $13.6 million capital raising.
Close to half that money, or $6.2 million, came from China-based lithium hydroxide producer Yibin Tianyi, in exchange for a 9.9% stake.
Yibin Tianyi is part of Contemporary Amperex Technology Co Limited (CATL), the world’s largest lithium-ion battery producer.
Yibin Tianyi is looking to increase its lithium hydroxide capacity to around 100,000 tonnes per year by 2024. To that end, it’s recently signed agreements with Pilbara Minerals Ltd [ASX:PLS] and AVZ Minerals Ltd [ASX:AVZ].
Global Lithium expects 2022 will be a busy year
Global Lithium will use the money to ramp up exploration at their Marble Bar Lithium Project (MBPL), of which they own 100%. MBPL is in the Pilbara, near major road infrastructure connecting to Port Headland and 15km from the town of Marble Bar.
The goal is to extend the lithium resource extension along with targeting regional exploration drilling. They’ll be drilling along the southern extension of the greenstone belt, where they’ve identified lithium mineralisation before. They’ll also use the cash to finish up the preliminary metallurgical test work program.
Global Lithium issued 19,771,250 new shares for institutional and sophisticated investors at 37 cents a share, raising around $7.3 million. They also issued 16,699,794 shares to Yibin Tianyi for $6.2 million, and an extra 405,405 shares for around $150,000 for Directors, subject to shareholder approval.
Global Lithium Managing Director Jamie Wright said:
‘The Capital Raising funds provide us with the ability to ramp up our activities on site as we seek to grow our project and we are looking forward to a busy 2022 period.’
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What happens next?
The company continues to drill at MBPL and will keep the market posted on the results as they come in.
At time of writing, Global Lithium shares are trading at 63 cents, up 29.9% from yesterday’s close at 48.5 cents.
The renewable energy transition will need plenty of lithium and, with a lithium shortage expected to hit the market as early as next year, the future is looking bright for lithium companies. If you are interested in lithium stocks, check out our free report ‘Three Lithium “Bounce Back” Stocks for 2021’.
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