Leo Lithium signs deal with Ganfeng Lithium to raise $72 million

Australia’s Leo Lithium Ltd said on Monday it signed a binding agreement with a unit of China’s Ganfeng Lithium Group Co Ltd to raise A$106.1 million ($72 million) and to cooperate for the ramp-up of its Goulamina project in Mali.

Under the cooperation deal, Leo Lithium and Ganfeng will also undertake a study into expanding the combined production capacity of Goulamina Stages 1 and 2 to 1 million tonnes per annum, the company said in a statement.

The parties will also fund a feasibility study for a joint downstream conversion facility in Europe or other locations close to West Africa, and form an exploration joint venture with an initial focus on Australia.

The lithium miner said it will issue 131 million shares to Ganfeng’s unit GFL International Co Ltd at an issue price of A$0.81 per share, representing an 11.7% premium to the stock’s last closing price on May 26.

On completion of the placement, Ganfeng will hold a 9.9% stake in Leo Lithium.

($1 = 1.4743 Australian dollars)

(By Echha Jain; Editing by Himani Sarkar and Sherry Jacob-Phillips)