Why the Argosy (ASX:AGY) share price is shooting 7% higher today

The Argosy Minerals (ASX: AGY) share price has rocketed more than 6% today after the company announced a $30 million placement.

Gretchen Kennedy

Gretchen grew up in a small Connecticut town where she learned to read The Wall Street Journal as part of the grade six enrichment program. She moved to Australia in 2002, earned a Master of Arts (Professional Writing) and went on to spend eight years writing on Wall Street. In June 2018, Gretchen returned to Australia and has since developed a keen interest in all things ASX. In December 2020, she started writing for the Motley Fool. Gretchen's usually writing something, reading a book or chasing her dogs around.

Published February 8, 2021 1:36 pm AEDT

The Argosy Minerals Limited (ASX: AGY) share price fired up more than 7.5% to 17 cents at the time of writing, after reaching a 19 cent high in opening trade this morning.

Argosy Minerals is a mining and exploration company with a 77.5% (and ultimate 90%) interest in the Rincon Lithium Project in Salta Province, Argentina. The company also has a 100% interest in the Tonopah Lithium Project in Nevada, USA.

A drawing of a white rocket streaking up, indicating a surging share pirce movement — Image source: Getty Images

Argosy share price gains after $30 million pump

Today, the company advised that it has received firm commitments for a $30 million placement to institutional, sophisticated and professional investors.

The capital raised will fully fund the production of battery quality lithium carbonate product from the Rincon site and contribute to on-going cash flow generation.

Argosy estimates that the Rincon site is presently a 2,000 tonnes-per-annum (tpa) operation. The construction timeframe is approximately 12 months with an estimated 4-month commissioning period after.

The company also plans to conduct feasibility and development works at the Rincon site to prepare for a 10,000 tpa scale operation.

According to today's release, Argosy believes that the company is now positioned to be the only developer able to provide battery quality lithium carbonate at commercial qualities in the near-term.

Positioning Argosy Minerals for growth

Argosy managing director Jerko Zuvela said the new funding was a testament to the company's project developments and future position.

Commenting on the $30 million placement, Mr Zuvela said:

We received a significant endorsement of our business with this placement, and are now fully funded to achieve 2,000 tpa scale production at our Rincon Lithium Project.

This provides a clear mandate and pathway for continued commercial scale development, as we become only the second ASX-listed battery quality lithium carbonate producer.

This places the company in an enviable position to generate cash flow and be in a much stronger position to advance strategic arrangements whilst developing the 10,000 tpa operation.

The Argosy share price has gained around 113% over the past 12-month period.

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