Canadian mine developer PMET Resources (TSX: PMET) is raising up to C$130 million ($96 million) to fund exploration and development work at its Shaakichiuwaanaan lithium project in northern Quebec.
Up to C$65 million will come via a public offering of common shares at a price of C$5.66 apiece, about 10% below Friday’s close on the Toronto Stock Exchange, while the remainder comes from a private placement of flow-through shares conducted at a price of C$9.30 per share, PMET said Monday in a statement. It expects the offerings to close by Feb. 19.
Formerly known as Patriot Battery Metals, Volkswagen-backed PMET is working towards a final investment decision on Shaakichiuwaanaan – which it says may host the largest lithium pegmatite resource in the Americas and one of the 10 biggest in the world – by the end of next year. It also has tantalum and caesium mineralization.
An October feasibility study envisioned a late 2029 commissioning for a C$1.5 billion mine that could operate for 20 years, producing about 800,000 tonnes annually and generating an after-tax net present value of C$1.6 billion with a 4.7-year payback period.
“These financings represent a major step forward for PMET as we continue to unlock the value of one of North America’s important new multi-commodity critical minerals assets at Shaakichiuwaanaan and advance it towards financing and development,” CEO Ken Brinsden said in the statement.
“The strong demand across both the public offering and the flow-through placement reflects growing institutional confidence in the scale, quality and strategic value of the project, and in our disciplined approach to developing it.”
Stock drops
PMET shares plunged 9.7% to C$5.68 Monday morning in Toronto, cutting the company’s market value to about C$930 million ($686 million). The stock has traded between C$1.68 and C$7.40 in the past year.
Proceeds will go towards producing an updated and optimized feasibility study for the CV5 deposit – to include an assessment of tantalum co-products – and completing a preliminary economic assessment on another deposit, CV13, for lithium, caesium and tantalum, PMET says.
The 2025 feasibility study excluded any potential for caesium (used in oil drilling) or tantalum co-products from Shaakichiuwaanaan, but there could be benefits, Canaccord Genuity mining analyst Reg Spencer said in a Feb. 4 note.
“PMET has been undertaking met test work on both potential co-product streams (including the potential for an underground bulk sample at CV5), which will inform a revised economic study in this year’s second half,” Spencer said. “While we currently don’t model any benefit from co-products, along with the potential inclusion of CV13, this could lead to improved project economics for Shaakichiuwaanaan.”
The global caesium market is about 2,500 tonnes a year and Sinomine Group’s Tanco mine in Manitoba produces more than 90% of global production in various refined products, Spencer said.
Lithium price
News of PMET’s fundraising comes as lithium prices rebound from a prolonged slump amid forecasts of a tighter market due to rising electric vehicle and battery energy storage system demand. Lithium prices have gained about 14% this year and 76% over the past 12 months, Trading Economics data show.
German automaker Volkswagen, PMET’s biggest shareholder with a 9.6% stake, plans to take part in a separate private placement for additional common shares, the company said. If confirmed, Volkswagen should invest as much as C$14 million, though the final amount and timing are still to be confirmed.
The cash injections will “significantly de-risk” the company’s funding requirements ahead of a final investment decision while preserving strategic flexibility, Brinsden said.
Raymond James will act as the offerings’ sole global coordinator. It will work with Bank of Montreal’s BMO Nesbitt Burns as agents on a marketed “best efforts” basis. The firms will have the option of buying an additional 15% of the offering – representing up to 1.72 million common shares – at any time until 30 days after closing.
