ASX-listed mineral exploration company Latin Resources has secured commitments to raise A$35m ($22m) through a new institutional placement, to support the exploration programme at its Salinas lithium project in Brazil.

As part of the placement, Latin Resources will issue 140 million of its new shares, each priced at A$0.25 per share, in order to raise A$35m. These new shares will be issued in a single tranche.

The placement brings significant capital injection into Latin Resources to expedite the Salinas project expansion as it is planning to conduct the drilling programme next year.

The funding will also support geotech and hydrogeology works for a definitive feasibility study (DFS), which is expected to be announced in the first half of next year.

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By GlobalData

Latin Resources managing director Chris Gale said: “We are delighted to announce the completion of the placement, which provides the company with significant headroom to accelerate its drilling efforts into 2024, with ten drill rigs mobilised currently. The new funds will enable the company to continue to grow its Salinas resource to become a tier-one lithium global project.

“I would like to thank all new and existing shareholders for their ongoing support and look forward to accelerating the development of Latin’s Salinas project as we continue to meet our objectives. We look forward to releasing to the market the DFS in H1 2024, with the final investment decision to be announced in Q4 2024.”

Located in the mining district of Minas Gerais, Salinas is Latin Resources’ flagship project.

At the Colina lithium deposit, the mineral resource estimate (MRE) has been defined at 45.2 metric tonnes at 1.32% lithium oxide (Li₂O) with an above cut-off of 0.5% Li₂O.

In a recent preliminary economic assessment, the company noted the Colina deposit within the Salinas project can have an after-tax net present value (NPV) of 8% of A$3.6bn with an internal rate of return of 132%, for a total life of mine revenue of A$12.6bn.