Lithium Plus Minerals locks in funding for Lei DSO with $1.66m

• Lithium Plus has firm commitments for a $1.66 million placement at 10 cents per share
• Suzhou CATH Energy Technologies is contributing $230,000, subject to Chinese outbound investment approval
• Funds will support Lei’s PFS, targeted exploration and discussions with potential offtake and funding partners

Special Report: Lithium Plus Minerals has secured firm commitments for a $1.66 million placement to advance its proposed Lei direct shipping ore (DSO) lithium project in the Northern Territory.

The placement, which is anchored by strategic shareholder CATH, will fund work on the project’s pre-feasibility study (PFS), targeted exploration and discussions with potential offtake and funding partners.

Lithium Plus Minerals (ASX:LPM) will issue shares at 10c each, a 9.1% discount to the last traded price on October 28 and a 16.6% discount to the 20-day volume-weighted average price.

The placement includes a $230,000 cornerstone commitment from Suzhou CATH Energy Technologies, subject to Chinese outbound direct investment approval.

Directors intend to participate with $60,000, subject to shareholder approval at a general meeting.

Eligible shareholders in Australia and New Zealand will also be offered a share purchase plan (SPP) targeting up to $1 million.

“This successful Placement reflects strong conviction in our fast-tracked development strategy for the Lei DSO Lithium Project, reinforced by the cornerstone backing of our major shareholder CATH,” executive chairman Dr Bin Guo said.

“Following the compelling outcomes of our recent Scoping Study, this funding provides the runway to accelerate the Lei Pre-Feasibility Study, progress strategic offtake and funding discussions, and test priority drill targets to expand the deposit footprint. 

“We remain focused on delivering a low-capex, high-margin DSO operation with the benefit of its proximity to Darwin Port.”

Putting the dollars to work

The funding follows the release of Lei’s scoping study in October, which outlined a potential six-year underground DSO operation with initial project capital of $87.7 million.

It estimated a post-tax net present value of $325 million, a post-tax internal rate of return of 75.4% and capital payback of 1.8 years from first production.

Those outcomes remain subject to further technical and economic assessment, and the scoping study does not establish an Ore Reserve or guarantee the project’s economic viability.

The PFS is expected to be completed by the end of the March quarter of 2027.

Exploration will target the primary Lei pegmatite, which remains open at depth, and a nearby sub-parallel pegmatite.

The funds will also support discussions with potential offtake partners and funding providers, alongside the existing offtake memorandum of understanding with Canmax.

Lei currently hosts a Mineral Resource of 5.22Mt at 1.50% lithium oxide, comprising 2.85Mt of Indicated material and 2.37Mt of Inferred material.

DSO offers a different route to market

DSO operations offer a relatively simple processing pathway.

Traditional hard-rock lithium developments often require a concentrator to upgrade mined ore into a higher-grade spodumene concentrate before export.

A DSO operation can instead crush and screen ore before shipping it directly to customers for further processing, potentially reducing upfront processing infrastructure requirements.

At Lei, the proposed operation would mine spodumene-bearing material underground, prepare the product on site and transport it by road to Darwin Port for export.

The project is around 80km from the port by road, with the company’s strategy drawing on that proximity to support its proposed low-capital development model.

LPM already has a non-binding offtake memorandum of understanding with Canmax and intends to advance discussions with additional customers and funding partners.

The company has also submitted its Supplementary Environmental Report for Lei, which remains subject to the Northern Territory environmental assessment process.

The proposed SPP is scheduled to open on November 9 and close on November 27, while the company continues its technical studies, commercial discussions and targeted exploration.

This article was developed in collaboration with Lithium Plus Minerals, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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