Albemarle has entered into a binding agreement to acquire Western Lithium, giving the company a significant exploration footprint adjacent to its Greenbushes mine.
The deal – which is worth $30 million in cash – will see Albemarle take ownership of the Greenbushes and Pilgangoora exploration projects owned by Western Lithium, a wholly owned subsidiary of Lithium Power International (LPI).
Lithium Power had intended to spin out Western Lithium into a new entity listed on the ASX, but “subdued capital market conditions” and an “attractive cash offer” from Albemarle changed this strategy.
Lithium Power said the Albemarle offer would provide better value and less risk to its shareholders instead of the Western Lithium initial public offering (IPO) and ASX listing.
The agreement will enable Lithium Power to focus on the development of its flagship Maricunga lithium brine project in Chile, which has the potential to produce 15,200 tonnes per annum of lithium carbonate equivalent (LCE) over a 20-year mine life.
“This agreement with Albemarle provides LPI with immediate value for our Western Lithium subsidiary company,” Lithium Power International chief executive officer Cristobal Garcia-Huidobro said.
“Despite the significant progress we had made towards an IPO of Western Lithium in the past months, this asset realisation will provide a significant uplift to the pre-money valuation of our Western Australia asset portfolio.
“It will add significant cash to the company’s balance sheet and is non-dilutionary to LPI shareholders, as the financing process of our flagship Maricunga project in Chile continues moving forward.”
The Greenbushes and Pilgangoora projects are located adjacent to two of the world’s premier hard-rock lithium mines of the same name.
The Greenbushes project spans more than 650 square kilometres of ground surrounding the Greenbushes mine, which is part owned by Albemarle Corporation and Tianqi Lithium Energy Australia through the joint venture company, Talison Lithium.
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