Piedmont Lithium (NASDAQ: PLL; ASX: PLL) has raised US$122.5 million in a public offering, issuing 1.75 million of its American Depository Receipts (ADS) with each ADS representing 100 of its ordinary shares at a price of US$70 per ADS.
The Australian junior will use the proceeds to continue the development of its 100%-owned Piedmont Lithium project, an integrated spodumene-to-lithium hydroxide project in North Carolina, about 40 km west of Charlotte.
The financing follows Piedmont’s deal in September to supply Tesla with high-purity lithium. The initial five-year agreement will see Piedmont provide the electric vehicle maker with about a third of its planned 160,000-tonne-per-year spodumene concentrate from its lithium deposits in North Carolina. Both companies can then extend the contract for another five years. The agreement is conditional upon both companies agreeing to start deliveries of spodumene concentrate between July 2022 and July 2023.
Piedmont started a definitive feasibility study (DFS) for its lithium project in December that envisions a 145,150-tonne-per-year mine and a spodumene concentrator producing 20,593 tonnes per year of battery-grade lithium hydroxide.
The study will incorporate the results from a pilot-scale spodumene concentrator project underway that is testing a bulk sample containing more than 50 tonnes of mineralised pegmatite collected from 17 locations across the property. The study on the concentrator project is expected to be completed in mid-2021, with a construction decision to follow, the company said.
Piedmont also commenced a separate DFS in March for a planned lithium chemical plant incorporating lithium conversion technology developed by Metso Outotec, a Finland-based firm that develops sustainable technologies for the minerals processing, aggregates, and metals refining industries.
The technology, which excludes an acid roasting stage used in conventional spodumene conversion, is expected to improve the economics of the plant by eliminating the consumption of sulphuric acid and the production of sodium sulphate waste product, significantly reducing carbon dioxide emissions from the plant.
That study, which is due to be completed in the third quarter, will also evaluate other initiatives to improve the operation’s environmental, social, and governance profile. These include installing solar power generating capacity and replacing the mine fleet with in-pit crushing and conveyor systems to improve the project’s economics and reduce emissions further.
In addition, Piedmont plans to complete an updated scoping study in May that will assess the potential for a larger production profile of the project and the expanded production of by-products, including quartz, feldspar, and mica for sale to the clean energy, ceramics, and automotive industries. The results from the study will be incorporated into the DFS.
In the meantime, the company is conducting a 25,000-metre drill program with five drill rigs. Results from the program will be incorporated into an updated mineral resource, which is slated to be released in April, and will then be included in the DFS, with infill drilling completed by August, the company said.
If all goes to plan, Piedmont said it expects the construction of the project to be completed in 2022.
An updated resource estimate for the project in 2019 outlined 13.9 million indicated tonnes grading 1.16% lithium oxide (Li2O) for 161,000 tonnes contained Li2O and 398,000 of lithium carbonate equivalent (LCE). Inferred resources add 14 million tonnes of 1.06% Li2O for 148,000 tonnes of Li2O and 366,000 tonnes of LCE.
Piedmont said it also plans to use the proceeds from the public offering to fund strategic investments it announced in January in Sayona Mining (ASX: SYA; US-OTC: DMNXF) and its 100%-owned subsidiary, Sayona Quebec.
Sayona Quebec is developing the Authier lithium project in Quebec. It also owns the Tansim lithium project in Quebec and is looking to acquire the Quebec-based North American Lithium’s assets.
Under the agreement, Piedmont has acquired an initial 9.4% interest in Sayona Mining for a US$3.1 million share investment and two unsecured convertible notes for US$3.9 million, which upon conversion would give Piedmont an additional 10% interest. In addition, Piedmont will purchase a 25% stake in Sayona Quebec for approximately US$5 million in cash.
The two companies also signed a binding offtake arrangement under which Piedmont will purchase up to 54,431 tonnes per year of spodumene concentrate, or 50% of Sayona’s Quebec production, whichever is greater, at a price ranging from US$551 per tonne to US$992 per tonne of spodumene concentrate on a delivered basis.