Canadian lithium junior surges 45% after $460m injection
Shares in Nemaska Lithium Inc soared on Friday after the company announced it has received a letter of intent for a $460m (C$600m) investment from specialist mining investment firm, Pallinghurst.
Pallinghurst is contemplating C$200m private placement at C$0.25 per share and a stand-by purchase agreement to fully guarantee the successful completion of a rights offering of up to C$400m at the same issue price, according to a press release.
The funding will enable Nemaska to complete the construction of its Whabouchi hard rock lithium mine in the James Bay region and Shawinigan processing plant north of Montreal.
After a trading halt was lifted, shares in Nemaska gained as much as 45% to $0.32 a share in Toronto, lifting the market value of the developer to $260m. The stock had been under pressure since February when Nemaska said it was facing a budget overrun of C$375m on the project.
Last year, Nemaska arranged $1.1 billion financing for the lithium project. SoftBank’s Vision Fund, the largest tech investment fund ever assembled, entered the mining sector for the first time in May 2018, buying up to 9.9% of the Quebec City-based company.