Here’s why the Piedmont Lithium Ltd (ASX:PLL) share price is dropping lower after returning from a trading halt…
The post Here’s why the Piedmont Lithium (ASX:PLL) share price is dropping lower today appeared first on Motley Fool Australia. –
The Piedmont Lithium Ltd (ASX: PLL) share price is edging lower on Thursday after returning from its trading halt.
At the time of writing the Piedmont Lithium share price is down 2% to 41.2 cents.
Why was Piedmont Lithium in a trading halt?
This morning the US-based lithium miner’s shares returned to trade after completing an underwritten US public offering.
According to the release, the company has issued 2 million American Depositary Shares (ADSs), at an issue price of US$25.00 per ADS, to raise gross proceeds of US$50 million (A$70.6 million).
Each ADS represents 100 of the company’s ordinary shares that are listed on the Australian share market. On a per share basis, this represents a price of 35.3 Australian cents per share, which is a 16% discount to its last close price.
In addition to this, the company has granted the underwriters a 30-day option to purchase up to an additional 300,000 ADSs at the issue price of the offering.
Management advised that the proceeds of the offering will be used to continue the development of its Piedmont Lithium Project. This includes a definitive feasibility study, testwork, permitting, further exploration drilling, and general corporate purposes.
What’s next for Piedmont Lithium?
Now the company has raised its funds, it can start to focus on getting its operation ready to supply material to electric vehicle giant, Tesla.
Last last month the company announced that it had signed a binding sales agreement with Tesla for an initial five-year term for the supply of spodumene concentrate (SC6) from its North Carolina deposit. The deal also includes the option to extend it for a further five years by mutual agreement.
Piedmont and Tesla have agreed a fixed commitment which represents approximately one-third of the lithium miner’s planned SC6 production of 160,000 tonnes per annum. It also includes an option for additional SC6 upon Tesla’s request. Deliveries are expected to commence between July 2022 and July 2023.
Man who said buy Kogan shares at $3.63 says buy these 3 ASX stocks now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
In this FREE STOCK REPORT, Scott just revealed what he believes are the 3 ASX stocks for the post COVID world that investors should buy right now while they still can. These stocks are trading at dirt-cheap prices and Scott thinks these could really go gangbusters as we move into ‘the new normal’.
*Returns as of 6/8/2020
- Why Piedmont Lithium (ASX:PLL) and these ASX shares just hit new highs
- Could these US-based ASX lithium shares land a deal with Tesla (NASDAQ:TSLA)?
- Forget day trading and buy and hold these fantastic ASX shares
- ASX 200 finishes flat, A2 Milk shares drop 10%
- Is the run over for ASX lithium shares after Tesla’s battery day?
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.