Mali Lithium raises cash for Morila gold mine buy

The capital raise will consist of a A$64-million share placement, with an additional A$6-million to be raised under a share purchase plan (SPP).

An initial 47.6-million shares will be placed under Mali Lithium’s initial placement capacity, priced at 16c a share to raise A$7.6-million. A second tranche placement of some 354.2-million shares will be subject to shareholder approval at a meeting expected in late October.

The placement price represented a 17.9% discount to the company’s last closing price on September 2, and an 11.9% discount to its five-day volume weighted average share price.

The first tranche of the placement is expected to settle on September 11.

In addition to the share placement, Mali Lithium will also undertake an SPP, under which shareholders would be allowed to subscribe for up to A$30 000 of additional shares, also priced at 16c each.

The SPP will open on September 21 and will close on October 21.

“We are delighted with the support from institutional and sophisticated investors and in turn the strong endorsement of the Morila gold mine acquisition,” said Mali Lithium executive chairperson Dr Alistair Cowden.

“We are particularly pleased to welcome Resolute Mining as a shareholder. Resolute are a leading West Africa-focused gold miner who have successfully operated the nearby Syama gold mine in Mali for more than a decade. The opportunity to develop a strategic partnership with Resolute in Mali will be investigated in the coming months.”

Cowden said that the acquisition of the Morila project represented a watershed moment for the company.

“In becoming a global producer with a significant mineral resource base, we intend to build shareholder value through near-term production growth and increasing mine life. This fund raising is an important step in the process as it enables the completion of the acquisition of Morila.”

The acquisition of the Morila project is expected to cost between A$22-million and A$27-million, and would instantly transform Mali Lithium into a cash generating gold producer.

The mine is forecast to produce some 26 350 oz of gold from November 2020 to the second quarter of 2021, with Mali Lithium saying that there was significant potential for near-term growth in production and mine life.

The project is currently producing at an annualised rate of up to 50 000 oz/y recovered gold from tailings, however, Mali Lithium plans to increase production by restarting openpit mining at satellite pits and at Morila itself.

The project is currently estimated to host an inferred resource of some 32-million tonnes, at 1.26 g/t gold for 1.3-million ounces of contained gold beneath and around the Morila main pit alone.