Galan Lithium Limited (ASX: GLN) (Galan or the Company) is pleased to announce that it has received firm commitments to raise A$31.5 million through an over-subscribed placement to institutional, sophisticated and professional investors (Placement).

Highlights:

• Firm commitments received to raise A$31.5 million through an institutional placement priced at A$1.05 per share
  
• Strong support received from domestic and offshore institutional and sophisticated investors
• Placement funds will be used to purchase long lead items for the LCE pilot plant and the Stage 2 DFS at Hombre Muerto West, whilst providing contingency funding for additional Greenbushes South work, further exploration and production well drilling.
• Galan to undertake Share Purchase Plan of up to approximately A$5 million for existing eligible shareholders
• Galan well-funded with pro-forma cash position of approximately A$50 million on completion of the Placement

The Placement provides the Company with significant flexibility with respect to its ongoing capital expenditure requirements at Hombre Muerto West (HMW), Candelas and Greenbushes South. In particular, proceeds from the Placement will be applied to accelerate:

• Purchase of long lead items in preparation for stage 1 (4ktpa LCE) including; liners, piping and lime plant;
  
• Prepayment for earthworks contractor;
• Workers camp expansion;
• Stage 2 DFS and production expansion studies;
• Further exploration and production well drilling;
• Contingency for extra work at Greenbushes; and
• General working capital.

“This is an exciting time to be involved in the Galan story. I wish to thank all the placement participants, old and new, who have strongly supported the Galan production plan that will take it from an initial smaller scale lithium producer to a big 60ktpa player. I also encourage all our loyal shareholders to get on board and participate in the entitlement issue which will get underway later this week.”

Placement

Under the Placement, the Company will issue 30 million new fully paid ordinary shares in the Company at A$1.05 per share (New Shares), raising a total of A$31.5 million before costs, to institutional, sophisticated and professional investors.

The issue price of A$1.05 per share, represents a 12.5% discount to the last closing price of A$1.200 on 17 May 2023 and 9.8% discount to the 10 day VWAP of A$1.163.

New Shares will be issued under the Company’s existing placement capacity under ASX Listing Rule 7.1 and are expected to be issued on Monday 29 of May 2023.

Canaccord Genuity (Australia) Limited acted as Sole Lead Manager and Bookrunner to the Placement.

Share Purchase Plan

In addition to the Placement, Galan intends to undertake a non-underwritten Share Purchase Plan (SPP) targeting to raise up to approximately A$5 million, with the Company retaining the right to accept oversubscriptions at its discretion. Under the SPP, eligible existing shareholders who were on the register at the record date, will be offered the opportunity to subscribe for up to A$30,000 of New Shares in the Company at an issue price of A$1.05 per New Share (being the same price as the Placement).

Further information on the SPP including the terms and conditions of the SPP and the proposed timetable will be set out in a SPP Offer Booklet that will be released on ASX and provided to eligible shareholders in the coming days.

New Shares issued under the Placement and SPP will rank equally with the Company’s existing fully paid ordinary shares.

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