UK-based mining company Northern Lithium is preparing for a significant fundraise next year that could involve a sale or listing of the business, Managing Director Nick Pople said.

The company intends to raise between GBP 30m and GBP 40m of funding from institutional investors and strategic investors through 2026 and 2027, which will finance its first production site and commercial lithium plant into operation, Pople said.

Northern Lithium is currently raising the second tranche of a GBP 6m fundraise that was announced in September 2024, of which the first, GBP 3.45m-tranche was completed in 1Q25, he said.

The company has secured second-tranche commitments exceeding GBP 2m and is expects to close the process before year-end, he said, noting that it might look to upside the raise to GBP 8.5m if demand remains strong.

The funds will be used to develop its projects in the north-east of England ahead of the larger equity capital raise, he said.

Specifically, the proceeds will finance completion of planning and permitting for the company’s first commercial site, execution of front-end engineering design (FEED) for the initial production facility, and additional exploration and appraisal drilling within the licensed area, he said.

Meanwhile, discussions are already under way with interested parties and advisors seeking involvement in the larger round, Pople said.

“Now is the time to speak with advisors such as corporate finance and other specialist advisors that could look to support the funding round next year,” he said.

Northern Lithium has already engaged a raft of technical advisors including SRK Consulting, WJ Group, EVOVE Tech, and Kurita, he said.

The structure of the fundraise has yet to be decided and will depend on market dynamics, Pople said. Northern Lithium has a large shareholder base experienced in financial markets, he said, noting that his own background includes running an AIM-listed fund, making an IPO a viable option if market conditions align.

However the next fundraise is structured, whether as a private funding round or via the public markets, it is expected to be supported by the UK Government through initiatives such as its National Wealth Fund, he said.

The company will also be attractive to original equipment manufacturers (OEMs), and to oil and gas exploration and production companies exploring upstream supply security, which may seek to acquire the business for security of supply and/or diversification, he said.

Alternatively, these parties could secure offtake agreements with upfront payments linked to long-term supply contracts, he added.

Northern Lithium’s ambition is to scale its lithium production to 20kpa by 2035. It will pursue a modular approach, with multiple production sites across its licensed area, he said. Each site will host four production units (two boreholes for extraction and reinjection, plus processing facilities), he added.

At 20kpta, the County Durham-headquartered company will be producing around 40% of the 50ktpa domestic production target outlined in UK Government’s Critical Minerals Strategy, and 25% of overall UK demand, he noted.

The company is spearheading domestic lithium production and holds exclusive long-term mineral rights over 240 sq km, granted by the Church Commissioners of England, which is potentially the largest single-landlord mineral licence in the UK, he said.

Northern Lithium’s approach is “brining, not mining”, which means extracting lithium from brines rather than hard rock, Pople said. This method offers significant environmental advantages, and lower capital and operating costs, compared to traditional mining, he added.

The business is also keen to tick the social part of environmental, social and governance (ESG). It has strong engagement with contractors, farmers, and service providers in the north-east of England, providing positive local economic impact, he said.

It is targeting the extraction of exceptionally clean brines with minimal impurities, making them among the easiest in the world to process using direct lithium extraction (DLE) technology, he said.

Technology partner Evove has processed brines from 87 global sources and has stated that Northern Lithium’s brines are the cleanest and simplest to extract, he added.

The company’s production is positioned at the bottom end of the global lithium cost curve, due to high recovery rates and exceptional purity achieved in recent demonstration-scale trials, he said.

Northern Lithium was founded in 2017 and has evolved to the point of proving the commercial viability of its operations, he said.

It performed an initial drilling programme in 2022, followed by pilot DLE testing in 2023, then long-term abstraction and reinjection pump trials in early 2024, and now successful DLE demo trials in 1Q25, which pave the way for commercial production by the end of 2027, he said.

The company has raised nearly GBP 10m to date, from private investors, primarily high-net-worth individuals and family offices; from retail investment through Crowdcube; and though feasibility grants from UK Government programmes such as the Automative Transportation Fund (ATF) and the Advanced Propulsion Centre (APC), Pople said.

The UK Government is continuing to support the lithium industry, which is sees as vital to domestic electric-vehicle battery production, grid energy storage, and defence sector applications, and has suggested it would fast-track planning and permitting for critical minerals through the Environment Agency, he added.