Investors have demonstrated their support for Australian Vanadium by committing to a share placement of $8.7m before costs, managed by 180 Markets.
New and existing institutional and sophisticated investors massively oversubscribed for the placement of 348 million shares priced at 2.5c each, which represents an 11% discount to the 15-day volume weighted average price of 2.8c.
One free attaching listed option with an exercise price of 2.5c and expiring on 18 December 2022 will be issued for every share subscribed.
The strong response is likely due at least in part to projections that the vanadium market could be in deficit until 2024.
Australian Vanadium (ASX:AVL) managing director Vincent Algar said: “The strong demand from investors for AVL supports the view that the company is now seen as the next global producer of vanadium based in Australia,”
“The funds will allow us to add further value to the company as we complete our BFS and move the company towards final financial decision, approval and construction.”
“The year ahead looks positive for vanadium in both steel and battery sectors. The funds raised through the placement puts the company in a strong financial position to deliver and realise further value for all stakeholders.”
180 Markets co-founder Shaun Factor said the fintech platform was thrilled to have acted as lead manager on the placement.
“What was even more pleasing was the raise was so heavily oversubscribed and included an impressive cornerstone book. Every time we lead a raise, we lead the cornerstone book so we are investing alongside all of our investors,” he told Stockhead.
“This is our second cornerstone raise for AVL, and we are confident Vincent Algar and the team can keep delivering.
“We reached a few records of our own on raise day on Friday. We had the most ever amount of investors bid into a single book (107) and we had the biggest amount of total bids ($15m).”
Proceeds to drive Australian Vanadium project
Proceeds from the placement will be used towards completion and delivery of the bankable feasibility study for the Australian Vanadium project.
The company’s namesake project is expected to produce 24.3 million pounds (11,022 tonnes) of V2O5 per annum at a low all-in cost of $US5.04/lb, over an initial mine life of 25 years.
It will also be used to finalise the design and build of Australia’s first vanadium redox flow battery (VRFB) electrolyte supply plant. The plant will be capable of producing 33 megawatt hours of energy storage capacity for Australian deployed VRFBs in both on and off grid situations.
Additionally, funds will be deployed to design and manufacture locally made residential and VRFB based stand-alone power systems; finalise offtake agreements for vanadium and iron-titanium co-products with steel makers and battery manufacturers; and prepare front-end engineering design and project execution for the Australian Vanadium project.
This adds to the Australian Government’s Modern Manufacturing Initiative award of a $3.69m grant to the company for the development of a high purity vanadium production circuit and the electrolyte plant.
Separately, the placement will fund airborne electromagnetics and drilling at the Coates nickel-copper-platinum project where recent drilling had uncovered nickel-copper-PGE anomalies comparable to those at Julimar along with other value addition projects.
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