CleanTech Lithium, the AIM-listed exploration and development company focused on sustainable lithium extraction, has announced plans to raise approximately £4.5m through a placing and subscription of new ordinary shares. The company also confirmed that certain existing loan notes will be converted into equity, a move that will strengthen its balance sheet and reduce outstanding debt.
The fundraising, which is being conducted at a price of 10p per share, is intended to provide working capital and advance the company's flagship projects in Chile's Atacama region. CleanTech Lithium is developing direct lithium extraction (DLE) technology, which is seen as a more environmentally friendly alternative to traditional evaporation ponds. The company's shares rose by around 8% in early trading on the AIM market following the announcement, reflecting investor confidence in the strategic move.
The conversion of loan notes into equity will see noteholders receive shares in lieu of repayment, thereby reducing the company's debt burden and aligning the interests of debt holders with equity shareholders. This restructuring is expected to improve CleanTech Lithium's financial flexibility as it seeks to secure further project financing and offtake agreements.
Analysts have noted that the fundraising comes at a time of renewed interest in critical minerals, driven by the global transition to electric vehicles and renewable energy storage. Lithium prices have stabilised after a period of volatility, and UK-listed miners are increasingly seen as key players in the supply chain. However, the sector remains sensitive to geopolitical risks and regulatory developments in South America.
For UK investors and pension holders with exposure to AIM-listed natural resources companies, the move signals a vote of confidence in CleanTech Lithium's long-term prospects, though the company remains a high-risk, early-stage venture. The fundraising is subject to shareholder approval at a general meeting expected to be held later this month.
Source: CleanTech Lithium RNS announcement