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Shares of IronRidge Resources Ltd (LON: IRR) gapped 13.6% higher after announcing that it had met all the conditions allowing Piedmont Lithium Inc. to fund its Ewoyaa Lithium project in Ghana for a sum of $102 million.
The terms of the deal will see Piedmont increase its shareholding in Ironridge up to 9.91% after being issued with 2.88 million shares worth £720,000 (US$1 million).
IronRidge will also increase its net cash position to $28 million to fund future growth initiatives at the Ewoyaa project.
Investors cheered the move that will make Ghana the first West African country to produce lithium. Today’s announcement leaves IronRidge in the enviable position of being on the fast track to producing lithium to meet the rising global demand for battery metals.
In my last article on the company, we saw how investors bought its shares based on reports of the growing demand for lithium in Lithium-ion batteries used in smartphones and many other electronic devices.
The lithium-ion battery market is expected to be worth $300 billion by 2030, with the World Bank expecting the global demand for battery metals to surge 1,000% by 2050.
IronRidge has other gold projects in Chad and Côte d'Ivoire with excellent resource potential, but these are still far behind in the development stages.
Vincent Mascolo, IronRidge’s CEO, said: “Today's completion marks a pivotal time in IronRidge's development of Ewoyaa; from initial discovery to being fully funded through to production. We are delighted to be in a position to confidently advance the Project whilst working alongside Piedmont towards the first lithium production in Ghana.”
Keith Phillips, Piedmont’s President & CEO, said: “We are pleased to have concluded these transactions and look forward to partnering with IronRidge to maximise the potential of the Cape Coast Lithium Portfolio. Ewoyaa is a high-quality asset with the potential for low capital and operating costs, and the broader portfolio offers tremendous exploration upside.”
IronRidge Resources share price.
IronRidge Resources shares gapped 13.6% higher to trade at 23.8p, rising from Friday’s closing price of 20.95p.
IronRidge Resources shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are IRR shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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