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China’s NextView New Energy will buy all the issued and outstanding common shares and warrants of Lithium X for $2.61 per share and $0.01 per warrant.
China’s NextView New Energy Lion Hong Kong deepened its stake in the lithium sector on Monday (December 18) with a deal to acquire Lithium X Energy (TSXV:LIX).
The company has entered into a definitive agreement under which it has agreed to acquire all the issued and outstanding common shares and warrants of Lithium X for $2.61 per share and $0.01 per warrant. In total, the deal is valued at $265 million.
Lithium X’s main asset is its Sal de los Angeles lithium brine project in Argentina’s Lithium Triangle. About $20 million was spent on the project between 2010 and 2017, and it has a resource estimate of 1.037 million tonnes of lithium carbonate equivalent in the indicated category and 1.007 million tonnes of lithium carbonate equivalent in the inferred category.
“The acquisition of Lithium X’s wholly owned flagship project, the Sal de los Angeles lithium project … represents a key cornerstone investment in NextView’s strategy of developing a leading global player in the new energy sector,” said Yaping He, managing partner at NextView.
According to the Financial Times, the Lithium X acquisition is NextView’s second foray into the lithium space. Last week, the company agreed to acquire a 19.89-percent equity interest in Bacanora Minerals (TSXV:BCN,LSE:BCN). Bacanora’s flagship project is its Sonora lithium project in Mexico; a feasibility study for the project points to an estimated pre-tax NPV of US$1.253 billion and an IRR of 26.2 percent.
In addition to Sal de los Angeles, Lithium X holds the Arizaro lithium brine project, also in the Lithium Triangle. It covers 33,846 hectares in the western and eastern portions of the Salar de Azario, one of the largest-known salt lakes in the world. Through its ownership interest in Pure Energy Minerals (TSXV:PE), Lithium X is also involved in Nevada’s Clayton Valley, another lithium hotspot.
“We believe this $265 million transaction puts our flagship asset, Sal de los Angeles, in the hands of a well-funded, technically capable team. We thank NextView and its partners for their commitment to this transaction and provide our best wishes in their continuing efforts to complete on our mission,” said Paul Matysek, Lithium X chairman, and Brian Paes-Braga, founder, CEO and director at the company.
Lithium X has summarized the benefits of the transaction to its shareholders as follows:
- Provides immediate liquidity to common shareholders in the form of $2.61 per share
- Represents premium to shareholders of 29.4 percent based on the 20-day VWAP ending on December 15, 2017
- Removes future financing, dilution, commodity, construction, execution and country risk
- Transaction represents a premium of 37.4 percent over the highest price at which Lithium X has completed a financing ($1.90) since becoming a lithium explorer and developer
The company says shareholders will vote on the deal in a special meeting expected to take place in February. As of 11:20 a.m. PST on Tuesday (December 19), Lithium X’s share price was changing hands at $2.49, up 16.9 percent. In the last year its share price has risen 25.76 percent.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
