Newly-established explorer Kali Metals has launched a $12 million initial public offering to fund a suite of lithium assets in Western Australia, New South Wales and Victoria.

The junior lodged a prospectus with the Australian Securities Exchange this week and expects to make its market debut in December.

Kali was established from the spin out of Australian lithium projects owned by Kalamazoo Resources (ASX: KZR) and Canadian gold miner Karora Resources.

It is designed to be a critical minerals exploration company backed by an experienced management team and board with a track record in value creation.



The spin-out will enable Kalamazoo to focus its attention on development of the Ashburton gold project, for which it recently announced an updated mineral resource estimate of 16.2 million tonnes grading 2.8 grams per tonne for 1.44 million ounces.

Share issue

Kali’s public offering comprises 48 million fully-paid ordinary shares at an issue price of $0.25 each to raise $12 million before costs.

The company will reserve the right to accept up to a further 12 million shares at the same price to raise an additional $3 million.

Eligible Kalamazoo shareholders are expected to receive one Kali share for every 17.64 Kalamazoo shares via an in-specie distribution.

The total number of Kali shares expected to be on issue at listing will be 144 million, for an indicative and maximum market capitalisation of $36 million.

Shares issued as part of the IPO will represent approximately 41.62% of the registry.

Bell Potter Securities and Canaccord Genuity (Australia) have been appointed joint lead managers to the IPO.

Kali is expected to trade under the ticker code ‘KM1’.

‘Great opportunity’

Kalamazoo chief executive officer Luke Reinehr said the IPO presented a “great opportunity” for investors.

“We are offering potential shareholders the chance to invest in an incredible portfolio of lithium exploration assets in world-class hard-rock lithium regions, in close proximity to operating mines and deposits… we believe this provides Kali with an unrivalled exploration portfolio,” he said.

“Our board has significant experience in the mining industry and will aim to ensure that funds raised through the IPO will be utilised in a cost-effective manner to advance these projects.”

Asset portfolio

At listing, Kali will own an asset portfolio across 3,854 square kilometres of WA’s Pilbara and Eastern Yilgarn regions (namely the DOM’s Hill, Marble Bar, Pear Creek and Higginsville lithium projects) as well as NSW’s emerging Lachlan Fold Belt (the early-stage Jingellic and Tallangatta lithium projects).

Additionally, the company will inherit the option to earn a 100% interest in the tin-tungsten and lithium-caesium-tantalum rights of the Yarara project, adjacent to Jingellic and vended by the Mining and Energy Group.

The option agreement was reached in February between Kalamazoo and the vendor.

The terms include a $50,000 fee which has already been paid and an expiry date of March 2024.

On exercise of the option, Kali will pay $225,000 to the vendor in return for all of the mineral rights across the Yarara tenement.

The vendor will retain a net smelter royalty of 1.5% over future mineral rights production.

SQM earn-in agreement

Kali will also be assigned Kalamazoo’s interests in an earn-in agreement signed in February with Sociedad Química y Minera de Chile SA (SQM) over the DOM’s Hill and Marble Bar projects.

In August, the Chilean miner Kalamazoo with notice of having satisfied Stage 1 of the agreement by completing payments of approximately $2.3 million for a 30% interest in the projects.

It confirmed it would continue to sole fund ongoing exploration to further boost its equity.

SQM currently produces approximately 19% of the world’s lithium supply.

Source: https://smallcaps.com.au/kali-metals-launches-ipo-advance-australian-lithium-assets/