ASX Release

Perth

2017/10/10

Lepidico Secures Strategic Alliance with Galaxy Resources

  • Galaxy agrees to subscribe A$2.9 million for 12% private placement of Lepidico Shares

  • Lepidico to offer shareholders an opportunity to participate on the same terms through a renounceable entitlement offer partially underwritten by Lead Manager, CPS Capital Group offered on a one for six basis at $0.01 per share, to raise up to approximately A$4 million

  • Total gross proceeds of up to A$7.0 million to fund Phase 1 L-Max® Feasibility Study through to final investment decision and further advance Lepidico’s resource development and exploration activities

Lepidico Ltd (ASX:LPD) (“Lepidico” or “Company”) is pleased to advise that Galaxy Resources Limited (ASX:GXY) (“Galaxy”) has agreed to subscribe for a 12% strategic shareholding in Lepidico via a private placement at 1 cent per share. Galaxy will acquire approximately 292 million shares in Lepidico for gross proceeds of A$2.9 million. The Company is also offering shareholders the opportunity to invest alongside Galaxy on the same financial terms, through a 1-for-6 stapled renounceable entitlement offer (“Entitlement Offer”) offered at $0.01 per share to raise up to approximately A$4 million. The Entitlement Offer is partially underwritten by CPS Capital Group Pty Ltd (“CPS”) to A$2 million.

Galaxy will be a strategic shareholder in Lepidico, with a 12% interest in the Company following the completion of a private placement of 291,750,910 Shares at 1 cent per share. Demonstrating Galaxy’s support of Lepidico’s business strategy and the L-Max® technology, Galaxy intends to take up all its rights in the Entitlement Offer, and will nominate a representative to the Lepidico board. The strategic alliance with Galaxy is based on a shared vision for the significant global opportunity provided by the commercialisation of Lepidico’s L-Max® technology. With its strong industry contacts and relationships in the lithium industry, Galaxy will be assisting Lepidico with future business and growth opportunities, evaluating potential synergies with their Mt Cattlin mine and James Bay projects, as well as accessing additional mica feedstock sources able to be treated by L-Max®. In finalising its strategic investment in Lepidico, Anthony Tse, Managing Director and Chief Executive Officer of Galaxy, commented: "We are pleased to support Lepidico as it looks to expedite the commercialisation of its LMax® technology, both financially as well as offering the benefit of our technical capabilities, industry contacts and market expertise. Our alliance with Lepidico will provide us with the capability to also potentially evaluate significant mica feedstocks in future. L-Max® is an exciting technology and we look forward to leveraging it to unlock value, in order to capitalise on the ongoing growth opportunities in the lithium sector.” The Entitlement Offer is partially underwritten by Lead Manager CPS to $2 million. Galaxy has agreed to take up its full entitlement and sub-underwrite up to $1 million in Entitlements not taken up. In addition, Bacchus Capital Advisers Ltd, Lepidico’s financial adviser, has advised its intention to take up its rights under the Entitlement Offer in full.

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