Lithium Universe Plans $1.7M Placement with 425M Shares and 228M Options

Capital Raising Details

Lithium Universe Limited (ASX, LU7) has lodged a prospectus dated 20 June 2025 for a placement aimed at raising up to $1.7 million before costs. The capital raising is structured in two tranches, the first tranche involves issuing 150 million shares with 75 million free-attaching options under existing placement capacity, while the second tranche proposes 275 million shares and 137.5 million options subject to shareholder approval.

The shares are priced at $0.004 each, with options exercisable at $0.008 and expiring 36 months from issue. Additionally, 15 million options will be issued to the lead manager as consideration for their services, also subject to shareholder approval.

Use of Funds and Strategic Focus

The proceeds from the placement will primarily fund the definitive feasibility study and detailed design of the Bécancour Lithium Refinery located in Québec, Canada. Other allocations include land option costs, research and development of microwave joule heating technology, and general working capital. The company forecasts that the funds raised, combined with existing cash reserves, will support operations through to October 2025, after which further capital raising will likely be necessary.

Lithium Universe’s strategic focus remains on establishing a lithium carbonate refinery to supply critical battery materials to the North American market, a sector experiencing rapid growth driven by electric vehicle demand.

Capital Structure and Shareholder Participation

Upon completion of the placement, the total shares on issue will increase from approximately 1.01 billion to 1.44 billion, while options outstanding will rise from 410 million to 638 million. Directors Iggy Kim-Seng Tan, Patrick Scallan, and Jingyuan Liu intend to participate in the tranche 2 placement, subject to shareholder approval, signaling confidence in the company’s prospects.

The placement is managed by 62 Capital Pty Ltd as lead manager, with Evolution Capital Pty Ltd acting as co-lead manager. The lead manager has also secured a 12-month right of first refusal for future advisory roles related to acquisitions or capital raisings.

Risks and Market Context

The prospectus underscores the speculative nature of the investment, highlighting key risks including the need for additional capital beyond this raise, regulatory and environmental compliance challenges in Canada, operational risks related to refinery construction and technology, and volatility in lithium prices. The company also notes geopolitical and trade policy uncertainties that could impact project costs and timelines.

Investors are cautioned that failure to secure further financing could delay or scale back the refinery project, and that the company’s ability to generate revenue depends on successful project development and market conditions.

Outlook

Lithium Universe’s capital raising is a critical step in advancing its flagship refinery project and associated technologies. While the funds will support near-term objectives, the company’s medium to long-term success hinges on securing additional financing and navigating the complex regulatory and market landscape of lithium supply chains.