Lithium news: Zinnwald raises £18.75m and Savannah reports Barroso progress
Lithium is on the minds of investors today as Zinnwald Lithium successfully completed a £18.75m placing, representing 60% of the company's current market cap, and Savannah Resources updated markets on its Barroso lithium project in Portugal.
Zinnwald Lithium raises at a premium
( ), a Germany-focused lithium developer, completed a fundraise of £18.75m at 10.41p/share. The price represents a 26% premium to Zinnwald's closing price on Wednesday. The premium pricing pushed Zinnwald shares up 24.4% this morning. Admission of the 180.1m new shares to AIM is expected on 29 March 2023.
The fundraise was led by AMG, which subscribed to 118.9m shares, giving it a 25.13% interest in Zinnwald. A further 24.5m shares have been placed with institutional and professional investors by Oberon Capital and Tamesis Partners at the placing price. Additionally, retail investors subscribed to 2.3m new shares at the placing price via a retail offer.
Significant shareholders Henry Maxey and Mark Tindall subscribed to new shares to maintain or enlarge pre-existing holdings. Henry Maxey subscribed for 26.3m shares to maintain a 14.62% stake. Mark Tindall subscribed for 8m shares to increase his stake to 4.17%.
Zinnwald said proceeds would be used to advance its lithium project in Germany towards a bankable feasibility study (BFS) by the end of 2023, and for continued exploration of the project.
Separately, Zinnwald yesterday announced final results for the year ended 31 December 22 (FY22). The company announced a pretax loss of €2.35m and reported no revenue. Zinnwald had cash and cash eq of £2.1m on 21 March 2023, not counting the £18.75m raised today.
Zinnwald's market cap as of 23 March 2023 is £30.07m.
Savannah Resources reports Barroso progress
( ) updated markets on its Barroso Lithium Project in Portugal after Portuguese regulator APA made public the project's environmental report and mine plan.
Barroso's mine plan features a an operating phase of 12 years, mineable material of 17.34Mt, average ore mining and processing rate at c. 1.5Mt/year, producing c. 200,000t/year of spodumene concentrate. The total planned project duration is 17 years, including construction, rehabilitation, and closure. Savannah expects the project to receive its environmental license in 2024.
Assuming APA issues a favourable EIS following the review period, Savannah will publish a new scoping study based on the revised project design, which incorporates current consensus spodumene concentrate price forecasts. Savannah expects to publish this study in early H2 2023.
Outlook for lithium
As the leading battery technology supporting renewable energy and electric vehicles, li-ion batteries will be in high demand for years to come. While lithium pricing has come down from 2022 peaks, demand is expected to remain high. Benchmark Minerals suggests the world will need to increase production of li-ion batteries from 0.6 TWh/year to 20 TWh/year by 2050, which would necessitate a 20-fold increase in lithium supply. The International Energy Agency says 50 new lithium mines will be needed by 2030 to fill the projected supply gap.
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