The Leo Lithium Ltd (ASX: LLL) share price is racing higher on Wednesday.
This comes after the lithium developer announced a debt facility update to the market.
At the time of writing, Leo Lithium shares are swapping hands at 44.5 cents, up 4.71%.
Leo Lithium completes debt funding package
Investors are rallying up the Leo Lithium share price following the company's financing efforts.
According to its release, Leo Lithium advised it has secured an expandable US$40 million debt facility with Joint Venture partner Ganfeng Lithium Co.
The facility agreement puts Leo Lithium in a strong financial position to cover its share of the costs in developing the Goulamina Project. The first-stage development costs are estimated to be around US$255 million.
The Goulamina JV now has a debt and equity package of US$170 million.
By securing the funds, this completes Leo Lithium's initial offtake marketing efforts and locks in all of spodumene product offtake from the first stage of the project.
Based in Mali, Goulamina is regarded as one of the world's largest spodumene projects and the first of its kind in West Africa.
It's forecasted that the mine will produce 506,000 tonnes of spodumene concentrate per annum, increasing up to 831,000 tonnes thereafter.
Early-stage development is underway and the first production is being targeted for the first half of 2024.
Leo Lithium managing director, Simon Hay commented:
Leo Lithium and Ganfeng are jointly developing Goulamina with plans to become one of the world's largest spodumene concentrate producers.
The finalisation of the debt funding package from Ganfeng significantly de-risks development and means we are now able to fully focus on accelerating development work on the Goulamina Project as we jointly bring the Goulamina into production.
The accordion facility provides Leo Lithium with a further funding option, an important feature as the globe experiences broad inflationary pressures.
Leo Lithium share price snapshot
Since listing on the ASX board last month, Leo Lithium shares declined by around 35%.
This follows the demerger from Firefinch Ltd (ASX: FFX) back in April this year.
Based on today's price, Leo Lithium has a market capitalisation of approximately $424.26 million.
