Australia-based exploration and development company Jindalee Lithium is set to secure up to A$6.7m ($4.51m) with total firm commitments of A$4.1m ($2.76m) to advance work at its McDermitt lithium project in the US.

The capital raise includes a placement of about A$0.6m ($0.4m) to institutional investors, directors, and management at A$0.3 ($0.2) per share with attaching options.

It also consists of a non-renounceable rights issue to existing shareholders on a one for six bases at A$0.3 ($0.2) per share with attaching options pursuant to a prospectus to secure up to around A$3.1m ($2.09m) as well as a funding facility.

The funding facility encompasses A$3m ($2m) investment for convertible notes with A$1.5m advanced on closing with a further, a A$1.5m ($1m) investment subject to shareholder approval and further potential funding of up to A$9m ($6.06m) for convertible notes.

Jindalee Lithium’s new funds will be utilised to complete the pre-feasibility study (PFS) of the McDermitt lithium project by incorporating new value optimisation opportunities.

These are expected to improve capital intensity, operating costs, and production outcomes for the American lithium project.

The company plans to use the new proceeds to continue its US activities, which include baseline studies, permitting, and stakeholder engagement.

Additionally, the funds will cover corporate costs, general working capital, and expenses related to the capital raise.

Jindalee Lithium CEO Ian Rodger said: “We are very pleased to have secured the support of Mercer Street as a long-term funding partner, alongside the continued backing of our existing shareholders.

“We firmly believe that the funding initiatives announced today will support Jindalee’s work programs for the foreseeable future. This funding will enable us to deliver several key value catalysts in the second half of 2024, including the optimised McDermitt PFS and a potential award decision for US Government grant funding.”

Located in Malheur County on the Oregon-Nevada border, the McDermitt lithium project is said to host a mineral resource (MRE) of 21.5 million tonnes of lithium carbonate equivalent (LCE) hosted in shallow mineralisation. It was first discovered in 2018.