Rock Tech Lithium (TSXV: RCK; OTC: RCKTF) has closed its previously announced marketed offering, issuing approximately 11.5 million units of the company priced at $3.50 per unit for aggregate gross proceeds of $40 million. This total includes a $30.7 million offering conducted through a syndicate of underwriters and a $9.4-million private placement.
Each unit issued under the financings comprised one common share of Rock Tech and half a common share purchase warrant. Each whole warrant entitles the holder to acquire an additional common share at an exercise price of $4.50 per share for a period of 36 months.
As Rock Tech disclosed earlier this month, net proceeds of the offering will be used to finance the development of its proposed high-grade lithium hydroxide converter and refinery facility in Guben, Germany, and to fund the continued exploration and development of the Georgia Lake lithium project in Ontario.
The converter-refinery project in Germany has an estimated initial capital cost of US$560.2 million and is expected to generate total revenues of US$7.6 billion over a 20-year life. The project's payback period is 5.3 years. The company recently signed a framework agreement to supply an unnamed global automaker based in Germany with lithium hydroxide over a five-year period.
At Georgia Lake, Rock Tech is developing an open pit and underground lithium mining operation with an initial mine life of 11 years. An updated preliminary economic assessment in March 2021 gave the project a post-tax net present value of US$289 million and an internal rate of return of 19.6%.