Lithium Australia NL has entered into a controlled placement agreement with Australia's Acuity Capital that provides the ASX-listed junior with up to A$5.0 million of standby equity capital.

The company said July 31 that it does not have to utilize the funding and can terminate the agreement at any time without cost or penalty.

Lithium Australia has placed 10 million shares with Acuity Capital as collateral against the facility.

The company expects to make a final investment decision on a large-scale, US$42 million pilot lithium processing plant by the end of this year after receiving better-than-expected results from a recent study.