Core Lithium targets lithium play

After Charger Metals revealed an “unsolicited, non-binding” takeover bid from Core Lithium, the latter has responded with its own statement.

Charger said it had been exploring ways to maximise shareholder value and maintain leverage to future lithium price increases, with Core’s involvement part of the discussion.

Core said it tabled a “confidential, non-binding” indicative proposal on July 25 for a merger of the two companies, with Core offering 0.9 of its shares for each Charger share.

Given the confidentiality of the deal, Core said it was “disappointed” Charger chose to disclose details of the proposal.

“The proposal is non-binding, incomplete and subject to customary conditions including completion of due diligence to the satisfaction of Core,” Core Lithium said.

“Core is disappointed Charger chose to release details of its proposal, notwithstanding that it was clearly stated to be confidential.”

While Charger’s board declined the offer, with the company believing the terms do not fully reflect the company’s potential, the company said it remains open to further discussions with Core, while it will continue talks with other interested parties as well.

Core believes there are strong synergies between its Finniss lithium operations and Charger’s Bynoe lithium project, both in the NT.

The miner highlighted its 48.2-million-tonne mineral resource, graded at 1.26 per cent lithium oxide, which puts in the top 10 lithium resources in Australia. Core also has an existing mine with production-ready infrastructure.

“Combining this with Charger’s exploration potential at Bynoe and Lake Johnston will give Charger’s shareholders significant and enhanced exposure to a lithium market recovery as well as exploration outcomes,” Core said.

Charger signed a farm-in agreement in January 2024 with Rio Tinto Exploration (RTX) at its Lake Johnston project in Western Australia.

Under this deal, RTX can earn a 51 per cent interest by investing $10 million in exploration, with a potential increase to 75 per cent by sole funding $40 million in exploration or completing a definitive feasibility study.

Core said it was willing to support this joint venture and ultimately hopes for a “mutually beneficial” transaction with Charger.

“Core … calls upon the board of Charger to engage constructively with Core and provide access to due diligence information, which Core is yet to receive,” Core said.