Cornish Lithium secures transformational funding package from leading technology metals investor TechMet
Cornish Lithium Ltd (“the Company” or “Cornish Lithium”), the innovative mineral exploration and development company based in Cornwall, UK, is pleased to announce that it has secured a transformational investment package of up to £18 million (the “Investment”) from TechMet Limited (“TechMet”), a leading technology metals investment company. Securing long-term investment from TechMet is a significant step forward for Cornish Lithium and allows the Company to step up its activities towards creating a domestic supply of lithium and other battery metals for the UK. The investment represents a key milestone for the Company given that it is the first investment that Cornish Lithium has secured from a financial institution. Cornish Lithium expects to benefit from TechMet’s deep knowledge of the battery metals supply chain and extensive commercial and strategic relationships.
- The investment from TechMet, a company that invests in technology metals projects around the world, will enable Cornish Lithium to fast-track development of its project portfolio in Cornwall and to significantly advance the Company’s strategy of establishing a domestic supply of battery metals.
- The investment will occur in two tranches: The first tranche of £9 million to be invested upon receipt of shareholder approval and the second tranche of £9 million will be invested, at the option of TechMet, following the delivery of the Scoping Study for the Trelavour Hard Rock Project (“Trelavour Project”), which is on track for completion in Q2 2022.
- The funding package will enable the Company to significantly accelerate its projects, including:
- The construction of a beneficiation and hydrometallurgical demonstration plant that will enable the Company to optimise the low carbon Lepidico processing technology to which Cornish Lithium secured a 15-year royalty free licence in 2020.
- Progress towards feasibility studies for the Trelavour Project, which will enable the Company to materially progress construction plans and to seek the necessary finance to build the Trelavour Project and move towards commercial production.
- Drilling additional geothermal evaluation boreholes and developing associated direct lithium extraction sites to further demonstrate Cornwall’s prospectivity for lithium contained in geothermal waters. The Company will also progress studies into the possibility of using heat from these boreholes to decarbonise local industries in Cornwall.
- Simon Gardner-Bond, Chief Technical Officer of TechMet, will join the Cornish Lithium Board.
Jeremy Wrathall, CEO and Founder of Cornish Lithium, said:
“We are delighted to welcome such a prestigious investor to Cornish Lithium. TechMet’s support validates the extensive work we have completed in Cornwall since the Company was founded in May 2016. The investment by TechMet, combined with the proceeds of the recent crowdfunding campaign, will provide the balance sheet strength and financial certainty to enable us to progress our projects and to create value for all our shareholders.
“Cornish Lithium has reached an inflexion point in the Company’s development where larger scale investment is required. This funding underpins the Company’s ambitions in Cornwall as we seek to progress our projects towards construction and commercial production. TechMet has the financial capability to contribute additional capital if required and thus represents a strong, long-term partner for Cornish Lithium. This investment reinforces the merits of our projects as we seek to progress towards commercial production. Importantly, TechMet’s mission of building ethical and environmentally sound supply chains for the metals needed to ensure the success of the clean energy and electric vehicle revolution, is fully aligned with that of Cornish Lithium.
“As the world transitions towards electric vehicles a material lithium supply gap is looming, especially in the UK given the requirement for an estimated 75,000 tonnes of lithium carbonate equivalent by 2035, according to The Faraday Institution. Cornish Lithium intends to position itself as a key player in the necessary supply chains to bridge that gap.
“Cornish Lithium looks forward to welcoming Simon Gardner-Bond as a director of the Company and to benefitting from Simon’s depth of knowledge and experience that he will bring to bear as we develop our projects.”
Brian Menell, CEO and Chairman of TechMet, commented:
“We have been extremely impressed by the innovative and talented Cornish Lithium team, which has made considerable progress over the past few years. We are excited to be supporting the next phase of development and building a long-term partnership with Cornish Lithium, which could become a cornerstone of the UK’s battery metal supply chain as well as having very positive implications for Cornwall’s local economy.
“This financing is an important step in advancing Cornish Lithium’s development programme. As the UK’s pre-eminent prospective lithium producer, it also represents an important step in the development of a domestic lithium supply for the UK economy.”
TechMet was founded in 2017 by British/South African metals industrialist, Brian Menell, with the aim of developing assets that produce metals for which global demand is expected to vastly outweigh supply as the world moves to clean energy technologies. Its assets include Li-Cycle Corp – North America’s largest lithium-ion battery recycling company listed on the NYSE; Brazilian Nickel – a mining and extraction company developing production of nickel and cobalt suitable for EV batteries; US Vanadium – which produces vanadium products suitable for redox flow batteries; and Tinco – a portfolio of producing tin and tungsten mines.
TechMet’s largest shareholders include Lansdowne Partners (one of London’s foremost asset managers); the US International Development Finance Corporation (the US Government’s development finance institution); and Mercuria (the global energy and commodity trading company) together with TechMet Chairman and CEO, Brian Menell.
Use of Proceeds
Proceeds from the Investment will be utilised by the Company to progress both its hard rock and geothermal work streams and is expected to provide sufficient working capital to fund its ambitious development plans to at least the end of 2022.
With regard to Cornish Lithium’s exploration plans for lithium contained in geothermal waters the funding will enable the Company to drill and evaluate additional sites, further demonstrating the regional potential in Cornwall. In addition, the Company will explore opportunities to generate complimentary commercial heat supplies in order to provide local businesses with low carbon energy. The funding will also enable further research into direct lithium extraction and refining technologies to optimise the recovery of lithium in a cost effective and sustainable manner.
In relation to the Trelavour Project, the proceeds of the Investment will enable Cornish Lithium to complete several key workstreams. Following completion of the Scoping Study, the Company intends to construct a demonstration scale beneficiation and hydrometallurgical plant in order to further refine the metallurgical extraction process, which will ultimately inform the design of a commercial production plant. The Company now expects to have sufficient funding to complete a feasibility study on the Trelavour Project which would be used by the Company to obtain the necessary debt and equity finance to enable project construction.
Terms of the Investment
The Investment, which is subject to shareholder approval, will occur in two tranches raising up to £18 million at a weighted average subscription price of 16.12 pence per share. The Investment will be split as follows:
- Tranche One: TechMet will subscribe for £9 million of new ordinary shares in Cornish Lithium at a subscription price of 13.5 pence per share.
- Tranche Two: Following the publication of the scoping study for Trelavour, TechMet can elect, at its option, to subscribe for a further £9 million of new ordinary shares in Cornish Lithium at a subscription price of 20 pence per share.
- All new shares issued to TechMet will rank pari passu with existing ordinary shares in Cornish Lithium Ltd.
- Following the completion of Tranche Two, and for so long as TechMet maintains a shareholding of 15% or above, TechMet shall have a Right of First Offer to market lithium products from the Company’s projects. TechMet will work with Cornish Lithium to prioritise UK based customers, including UK battery and automotive manufacturers.
- Following TechMet’s Tranche Two subscription, Cornish Lithium shall issue TechMet 13,500,000 warrants to subscribe for shares at par value upon the sooner of: (i) Cornish Lithium listing on a public exchange; or (ii) the Company authorising the commencement of construction of one of its projects at a commercial scale. The warrants are designed to further incentivise TechMet to utilise the experience of its team and extensive industry networks to help Cornish Lithium raise the required finance to build its projects.
Simon Gardner-Bond will join the board of the Company as TechMet’s nominee. Simon is TechMet’s Chief Technical Officer and has had a 20-year career as a geologist and mining analyst. Simon’s experience of capital markets and project appraisal will be of great benefit to the Company going forward.