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Alliance Mineral places A$19.6 million of shares as auditor flags going concern doubt

ALLIANCE Mineral Assets is placing A$19.575 million (S$20.9 million) of shares to Burwill Commodity as auditor, Ernst & Young (Australia) flagged uncertainty about the mining company's ability to operate as a going concern if it is unable to raise more funds.

As part of a revised lithium concentrate offtake agreement, Burwill is buying the shares in four tranches: A$4.375 million at S$0.26748 per share paid on Sept 30; A$5 million at S$0.26748 apiece by Oct 6; A$5.2 million at S$0.28234 per share by Oct 15; and A$5.0 million by Dec 31.

The pricing of the placement represents discounts of up to 10 per cent to Alliance's volume weighted average price of S$0.2972 on Sept 29.

The placement was announced as Ernst & Young said there was significant uncertainty about Alliance's ability to remain as a going concern.

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The auditor flagged a pre-tax loss of A$4.80 million (S$5,119,580) for FY2017, and A$4.08 million for FY2016, and cash and restricted cash of A$9.1 million as at Sept 28, 2017.

The company will need to raise more funds during the final quarter of 2017 to meet its committed and planned capex (capital expenditure) for its Bald Hill project, and for general working capital, the auditor said.

Alliance said that it will be able to remain as a going concern, citing the capital that will be raised through the Burwill placement.

The company's shares will resume trading on Thursday.