Technology Metals Australia Ltd (ASX:TMT) has attracted a new cornerstone investor in Resource Capital Fund VII LP, a fund managed by RCF Management LLC, as part of a placement that will raise $20 million.
The company has executed a binding subscription agreement with RCF VII for an equity investment of $13.5 million at $0.357 per share and upon completion, RCF will hold an 18% stake.
Firm commitments from existing, institutional and new strategic investors have also been secured to raise an additional $6.5 million at $0.375 per share.
TMT shares have risen as much as 15% to an intraday high of $0.46 and are up from A$0.31 at the market close on July 21.
“Highly regarded investor”
“We are extremely pleased to have secured the support of Resource Capital Funds, a highly regarded mining alternative investment firm,” TMT managing director Ian Prentice said.
“The investment from RCF VII further endorses the high-quality nature of our vanadium assets and provides us with a platform to focus on the integration of the Yarrabubba deposit into the development of the high-quality Gabanintha Vanadium Project.”
Use of funds
Total placement size is $20 million and it will completed in two tranches via the issue of 53,333,333 new fully paid ordinary shares in TMT at $0.375 per new share.
This placement and investment by RCF VII coincide with a strategic review to integrate the Yarrabubba deposit into the definitive feasibility study (DFS) for the high purity Gabanintha Vanadium Project (GVP).
The much higher V2O5 content of the Yarrabubba concentrate has potential to materially impact the processing efficiency and improve economic returns compared to the 2019 GVP DFS.
Proceeds from the placement will also be applied to:
Detailed engineering and design of GVP;
Potential early works and ordering of long-lead items; and
Working capital.
“Game-changer for TMT”
“The progression of test work at Yarrabubba has confirmed that the high-grade concentrate from this deposit is a game-changer for TMT,” Prentice said.
“We look forward to working with RCF as we advance towards potential financing and development.
“In addition, we are pleased to welcome a number of new institutional shareholders to our register as part of the placement and also acknowledge the support received from existing TMT investors, which ensured that demand for the raising was strong.”
The placement means TMT is funded through DFS and Front-end Engineering and Design (FEED) stages targeting project development from the second half of 2022.
“We are excited to support TMT in advancing the Gabanintha Vanadium Project towards development and integrating the Yarrabubba deposit into the development strategy,” head of RCF VII Martin Valdes commented.
VRFB batteries to hike vanadium demand
Developments in the energy-storage sector will soon spill over into the market, with vanadium prices predicted to rise dramatically, having increased over 50% in price per pound in the 2020-21 financial year.
Vanadium Redox Flow batteries (VRFB) are being positioned to challenge lithium-ion batteries in the grid-storage energy market, with significant advantages over the highly volatile battery material already being demonstrated:
No Degradation – Performance remains constant with excellent long term charge retention and rechargeability, most producers boasting an incredible 15,000-20,000 discharge cycles, far beyond the capacity of solid-state batteries which can usually achieve 4,000-5,000 charge/discharge cycles.
Low Energy Cost – Vanadium Redox batteries offer the lowest cost per kWh stored on the market, which coupled with their 20+ year lifespan makes these batteries incredibly energy efficient.
Safety – The electrolyte used in vanadium redox batteries is water-based and completely non-flammable.
Sustainability – Vanadium is fully reusable and recyclable at the end of battery life.
Long Life – Combining its 20+ year lifespan with its very high cycle life of up to 20,000 cycles, vanadium Redox batteries offer an incredibly long usage life.
GVP one of highest-grade vanadium projects
TMT is an Australian company with the primary purpose of identifying exploration projects in Australia and overseas with the aim of discovering commercially significant mineral deposits.
The primary exploration focus has been on the GVP 40 kilometres southeast of Meekatharra in the Mid-West region of Western Australia with the aim to develop the project to supply high-quality V2O5 flake products both to the steel market and the rapidly emerging vanadium redox battery market.
Consisting of nine granted tenements and four applications divided between the GVP (11 tenements) and Yarrabubba Project (two tenements), resource estimates from independent geological consultant CSA Global have indicated high-grade vanadium exists at the project, positioning it as one of the highest-grade vanadium projects in the world.
Placement details
Tranche 1 of the placement will raise about $13.6 million from the issue of ~36.4 million shares at $0.375 per share. This will utilise the company’s placement capacity under ASX Listing Rules 7.1 and 7.1A, with 21,434,209 shares to be issued under Listing Rule 7.1 and 14,922,806 under Listing Rule 7.1A.
Settlement of the Tranche 1 placement is expected to occur on or around Monday, October 4, 2021.
Tranche 2 will raise around $6.4 million from the issue of ~17.0 million shares at $0.375 per share, subject to shareholder approval to be sought during November.
The placement issue price of $0.375 per share represents a discount of 11.9% to the 15 day VWAP of $0.426 per share and a 6.3% discount to TMT’s last close price of $0.40 per share on September 20, 2021.
Sternship Advisers and Blackbird Capital Partners acted as financial adviser to TMT in relation to the RCF VII placement. Bridge Street Capital Partners and Ashanti Capital acted as joint lead managers in relation to the balance of the placement.
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