Newly formed exploration company Kali Metals has launched a $12 million initial public offering to fund a series of lithium projects in Western Australia, New South Wales and Victoria.
The junior filed a prospectus with the Australian Securities Exchange this week and is expected to make its market debut in December.
Kali was formed from the spin-off of Australian lithium projects owned by Kalamazoo Resources (ASX: KZR) and Canadian gold miner Karora Resources.
It is designed to be a major mineral exploration company supported by an experienced management team and board with a track record of value creation.
The spin-off will allow Kalamazoo to focus on developing the Ashburton Gold Project, for which the Company recently announced an updated mineral resource estimate of 16.2 million tonnes grading 2.8 grams per tonne (1.44 million ounces).
Share issue
Kali’s public offering includes 48 million fully paid common shares at an offering price of $0.25 each to raise $12 million before expenses.
The company reserves the right to accept up to an additional 12 million shares at the same price to raise an additional $3 million.
Eligible Kalamazoo shareholders are expected to receive one Kali share for every 17.64 Kalamazoo shares in a non-cash distribution.
The total number of Kali Shares expected to be issued upon listing is 144 million, representing an indicative and maximum market capitalization of $36 million.
The shares issued as part of the IPO will represent approximately 41.62% of the land register value.
Bell Potter Securities and Canaccord Genuity (Australia) have been appointed joint lead managers of the IPO.
Kali is expected to trade under the ticker code “KM1.”
“Great opportunity”
Kalamazoo CEO Luke Reinehr said the IPO was a “great opportunity” for investors.
“We offer potential shareholders the opportunity to invest in an incredible portfolio of lithium exploration assets in world-class lithium hard rock regions, in close proximity to active mines and deposits. We believe this gives Kali an unrivaled exploration portfolio,” he said.
“Our board has extensive experience in the mining industry and will work to ensure that the funds raised through the IPO are used in a cost-effective manner to advance these projects.”
Asset portfolio
At the time of listing, Kali will have an asset portfolio spanning 3,854 square kilometers in the Pilbara and Eastern Yilgarn regions of Western Australia (namely the DOM’s Hill, Marble Bar, Pear Creek and Higginsville lithium projects) as well as the emerging Lachlan Fold Belt in New South Wales (the early-stage Jingellic). and Tallangatta lithium projects).
In addition, the Company inherits the option to acquire a 100% interest in the tin-tungsten and lithium-cesium-tantalum rights of the Yarara Project, adjacent to Jingellic, which will be sold by Mining and Energy Group.
The option agreement was reached in February between Kalamazoo and the seller.
Terms include a prepaid fee of $50,000 and an expiration date of March 2024.
If the option is exercised, Kali will pay the seller $225,000 in consideration for all mineral rights in the Yarara Property.
Seller retains a 1.5% net smelter royalty on future production from mineral rights.
SQM earn-in agreement
Kali will also transfer Kalamazoo’s interest as part of an earn-in agreement signed in February with Sociedad Química y Minera de Chile SA (SQM) for the DOM’s Hill and Marble Bar projects.
In August, Chilean mining company Kalamazoo said it had complied with Stage 1 of the agreement by making payments of about $2.3 million for a 30 percent stake in the projects.
It confirmed that it would continue to solely fund ongoing exploration to further strengthen its equity capital.
SQM currently produces approximately 19% of the world’s lithium supply.
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