Ganfeng Lithium has exercised its project participation right to acquire a 35% interest in the Sal de la Puna (SDLP) lithium brine project, in Argentina, Arena Minerals reported on Thursday. The project covers 11,000 hectares of the Pastos Grandes basin.
The Chinese lithium producer will fund $7.79 million of the acquisition costs.
“The Sal de la Puna Project has the potential to host a sizeable resource which could be sufficient to support commercial production of lithium products,” Sam Pigott, Head of Business Development, North America for Ganfeng Lithium said in a media release.
Samples from a 2019 pumping test averaged 532 mg/l lithium, with a Mg/Li of 4.8.
Ganfeng Lithium said on Friday it would sell around HK$4.9 billion ($630 million) in new shares to boost capacity and fund potential investments.
The Chinese company in March announced an ambitious plan to increase its lithium production capacity roughly fivefold to 600,000 tonnes of lithium carbonate equivalent a year, as demand for the commodity used in electric-vehicle batteries surges again after a three-year downturn.
Ganfeng, which is listed in Shenzhen and Hong Kong, said in a filing just over 48 million new Hong Kong shares (H shares), equivalent to around 20% of its existing issued H shares, would be placed at a price of HK$101.35 per share.
That represents a discount of 5% to its closing price in Hong Kong on Thursday.
The company intends to use 80% of the HK$4.85 billion net proceeds for capacity expansion, mostly at its lithium projects overseas, and potential investment in lithium resources. The other 20% has been earmarked for replenishment of working capital and general corporate purposes.
“The company plans to use the net proceeds in the following one to two years,” Ganfeng said, adding that the shares would be placed with no less than six investors.
Banks CLSA, Merrill Lynch, UBS and Citigroup Global Markets were named as placing agents.
(With files from Reuters)