The Lake Resources N.L. (ASX: LKE) share price has been an outstanding performer on Monday morning.
At the time of writing, the clean lithium developer's shares are up a massive 24% to a multi-year high of 26 cents.
Why is the Lake Resources share price rocketing higher?
Investors have been fighting to get hold of Lake Resources shares this morning after it raised A$20.6 million from global institutional investors via a placement.
According to the release, the company raised the funds at a price of 16.5 cents per new share, which represents a 21.5% discount to its last close price of 21 cents.
The institutional investors will also receive one attached option for every two shares they acquired in the placement. The options will have an exercise price of A$0.30 and a two-year expiry. Though, they remain subject to shareholder approval.
If the 62.5 million options are ultimately exercised, it will inject a further ~A$19 million of cash into the company.
Why is Lake Resources raising funds?
Management advised that the company intends to use the net proceeds from the placement for a number of activities.
One of those is to operate the lithium chloride direct extraction pilot plant in California.
It will also use the funds to commission the demonstration plant on site at Kachi to produce larger samples for off-takers, complete the Definitive Feasibility Study (DFS) at Kachi, and complete the Environmental and Social Impact Study (ESIA) at the Kachi Project.
This means Lake's flagship Kachi Lithium Brine Project is now fully funded through to the construction phase in 2022. This allows the company to speed up the development of sustainable, high purity lithium.
Lake Resources' Chairman, Stu Crow, believes this placement is a transformational moment for the lithium developer. He commented:
"This is a transformational moment for Lake and its shareholders. We are excited to secure this support from North American, European and Australian institutional investors at this defining moment of the company's development. Roth Capital has introduced a number of new investors to Lake who follow the rapidly growing clean tech battery materials sector and will broaden our exposure to international financial markets."
This sentiment was echoed by Lake Resources' Managing Director, Steve Promnitz. He said:
"Securing these funds delivers certainty to deliver the flagship Kachi project through the Definitive Feasibility Study amid the rapid growth of the clean energy sector. This transaction places the company in its strongest financial position ever. Lake will hold in excess of A$25 million following this placement and anticipates a further $6m to be added by July as existing options convert."
