Why is Delta Lithium Raising $70 Million Through an Entitlement Offer?

Delta Lithium Limited, an Australian lithium exploration company, has announced an accelerated non-renounceable entitlement offer to raise approximately $70. 2 million. This fundraising initiative aims to provide the necessary funds for expanded drilling programs at the Mt Ida Lithium Project in the Goldfields region and the Yinnetharra Lithium Project in the Gascoyne region of Western Australia. The proceeds will also support the completion of a scoping study at Yinnetharra and a Definitive Feasibility Study and Final Investment Decision at Mt Ida, both expected by late-2024.

Major Shareholders Indicate Their Support

Mineral Resources Limited and Hancock Prospecting Pty Ltd, major shareholders representing approximately 22% of Delta Lithium's existing shares, have expressed their intention to take up their full entitlements. Their participation alone will account for approximately $15. 4 million of the total Entitlement Offer.

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Furthermore, the Entitlement Offer is fully-underwritten by Mineral Resources Limited, ensuring the success of the fundraising initiative.

Details of the Entitlement Offer

Under the Entitlement Offer, eligible shareholders will have the opportunity to purchase two new fully paid ordinary shares in Delta for every seven existing shares they hold. The offer price for the new shares is set at $0. 46 per share, representing an 11. 5% discount to the last traded price of Delta Lithium shares. It also offers a 9. 2% discount to the theoretical ex-rights price and discounts of 17. 0% and 19. 3% to the 5-day and 10-day volume-weighted average prices, respectively.

Institutional and Retail Components

The Entitlement Offer consists of two components: an institutional component and a retail component. The accelerated institutional component will be open to eligible institutional shareholders from November 13 to November 14, 2023. The retail component, available to eligible retail shareholders in Australia or New Zealand, is anticipated to be conducted from November 20 to December 4, 2023, unless extended. The offer ratio and offer price for new shares will be the same for both components.

By raising approximately $70 million through the Entitlement Offer, Delta Lithium aims to strengthen its financial position and ensure adequate funding for its drilling programs and project milestones. The company is confident in the support of its major shareholders and the fully-underwritten nature of this fundraising initiative. This capital raise will play a crucial role in advancing Delta Lithium's exploration projects and moving towards the completion of key feasibility studies.

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