Kalium Lakes Ltd., Balcatta, Western Australia, on Aug. 18 announced that it has received firm commitments from investors for a two-tranche placement of fully paid ordinary shares to raise A$22 million (before costs). The placement will comprise the issue of approximately 550 million new shares at a price of A$0.04 per share. The price represents a 56.5% discount to the last traded price of A$0.092 per share on Aug. 9.
Kalium will also offer all of its existing eligible shareholders the opportunity to subscribe for up to a maximum of A$30,000 worth of shares at an offer price of A$0.04 per share under a share purchase plan (SPP) to raise up to an additional A$8 million. The SPP is subject to the company obtaining shareholder approval for the issue of shares under the SPP.
Kalium’s largest shareholder, Greenstone Resources, has committed to take up to A$8 million under the placement. Greenstone’s participation in tranche two of the placement is subject to the company obtaining shareholder approval. Co-founder and Director Brent Smoothy has also committed to subscribe for A$2 million under the placement, pending shareholder approval.
Kalium said the capital raising is being undertaken to fund additional working capital during ramp-up of Kalium’s Beyondie Sulfate of Potash Mine (BSOPM), which targets an initial production target run-rate of 80,000 mt/y by first-quarter 2023, and to assist in the expansion of the BSOPM to 120,000 mt/y production run-rate, which is targeted to be achieved by third-quarter 2024. It said additional working capital is primarily required due to the delayed production profile for BSOPM.
Kalium also said it has successfully negotiated the terms of a debt restructure with its two senior lenders, KfW IPEX-Bank and the Northern Australia Infrastructure Facility, to facilitate the expansion to 120,000 mt/y. As part of the debt restructure, the existing royalty holders of the company have also agreed to subordinate and defer the payment of their royalties.
“We are pleased to have successfully undertaken the debt restructure and received firm commitments for the necessary additional equity injection,” said Kalium CEO Len Jubber. “This places the business in a position to now deliver on the targeted ramp-up profile at Beyondie, commencing with the full restart of the SOP process plant in September. I would like to thank our financiers and major shareholders for their support in this process, as well as welcome all new shareholders to the Kalium register.”
The trading of Kalium shares were temporarily suspended Aug. 9 on the Australian Securities Exchange pending the announcements and resumed on Aug. 18.