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Nemaska firms financing with US$150m Orion streaming

Posted by: Admin | Posted on: April 16th, 2018 | 0 Comments

The company had flagged the streaming deal to an “international financial institution of good standing” last month as its works to shore up financing of $775-$825 million, to get the mine and plant underway and for general working capital.

It will add almost C$100 million (US$79 million) to the kitty through a placement announced earlier this month to technology company SoftBank Group for up to a 9.9% stake in the lithium company.
Nemaska said it expected to provide further details “in the short-term” on discussions for additional equity financing, and debt financing of $300-$350 million.

President and CEO Guy Bourassa said the streaming agreement limited shareholder dilution, lowered the company’s cost of capital and was under competitive and flexible terms.

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For its part, Orion Resource Partners (UK) portfolio manager Michael Barton said Orion was delighted to become a major investor “in one of the most exciting lithium projects globally”.

The deal covers 14.5% of lithium hydroxide and lithium carbonate produced and the first tranche of $75 million was expected to be paid once project financing was in place.

A January feasibility study for the project outlined a capex of C$801 million (US$616 million), an after-tax payback of 2.9 years and an internal rate of return of 30.5%.

It forecast average production of almost 23,000 tonnes of lithium hydroxide and 11,000 tonnes of lithium carbonate a year over a 33-year mine life.

At the time, Bourassa had hoped to complete financing during the March quarter.

The company’s shares peaked at a 52-week high of C$1.40 in January but have returned to levels of about a year ago, closing up 4c on Friday to $1.32.

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