Galaxy Resources said that it will raise nearly AUD161m ($118.55m) in equity financing for advancing the Sal de Vida and James Bay lithium projects located in Argentina and Canada, respectively.

According to the Australian lithium producer, the equity financing will be executed through a fully underwritten pro-rata accelerated non-renounceable entitlement offer and an institutional placement.

The entitlement offer will be for nearly 29 million new shares of the company to raise about AUD50m ($36.82m).

The institutional placement will be for approximately 65 million new fully paid ordinary shares in the company to raise AUD111m ($81.73m).

According to Galaxy Resources, the funding will help in meeting its previously stated development timeline for stage 1 of the fully-owned Sal de Vida lithium brine project located in the Catamarca Province.

Besides, the equity financing will mitigate pricing uncertainty of alternative funding routes resulting from the Covid-19 pandemic, stated the company.

The Australian miner expects to complete the front end engineering and design (FEED) for the first stage of the Argentine lithium project by Q1 2021.

First production at the Sal de Vida mine is targeted for late 2022.

Galaxy Resources CEO Simon Hay said: “This Equity Financing provides Galaxy with an enhanced level of certainty to commit to execute and develop Sal de Vida into a successful, lowest-quartile cost lithium brine operation.

“Securing this funding for Stage 1 would allow us to confidently proceed into the early works phase, contract long lead items and complete pond construction in 2021 during the weather window.”

At the James Bay lithium pegmatite project in Quebec, the company will use the funding for executing pre-development activities. These include completion of a preliminary economic assessment (PEA), an updated feasibility study, finalisation of engineering design, and also execution of stakeholder agreements to prepare the lithium project for the construction stage.

Galaxy Resources said that speeding up the early stage development of James Bay will help it take advantage of the surge in electric vehicle growth in Europe and North America.