The combined company will have an increased market capitalization of $150 million, and will put Western Lithium’s Kings Valley project in Nevada and Lithium Americas’ Cauchari-Olaroz project in Argentina under one roof.

According to Tuesday’s release, the companies are contemplating a two year development timeline for Cauchari-Olaroz and a four year timeline for Kings Valley. The deal has been approved by the boards of both companies.

“The merged company will hold two of the leading lithium development projects in the world. We believe this combination will also result in better liquidity, market capitalization and funding opportunities”, said Western Lithium CEO, Jay Chmelauskas, in a statement. “We have been watching the progress of Lithium Americas for several years and believe that it is the right time to combine our efforts and take a leadership role in the sector.”

John Kanellitsas, CEO of Lithium Americas, reaffirmed the tone of that statement, stating that although Western Lithium will be acquiring Lithium Americas, the move is “very much a merger.”

The merger dates back to discussions that began in 2012, According to Kanellitsas. “We have been talking and sharing strategic ideas and visions since then,” he said. “We know Jay and his team and board very well.  we complement each other and share same outlook and values.”

To be sure, both companies are fairly well known juniors in the lithium space. Western Lithium has been in the news regarding its Hectatone™ clay business, which runs separately from its lithium project, while many analysts and market watchers have been keeping an eye on Lithium Americas as the company continues talks with Korean Steelmaker POSCO. Lithium Americas announced at the start of May that it was in talks regarding the use of POSCO’s proprietary lithium extraction process in the development of Cauchari-Olaroz.

According to the joint press release put out by Western Lithium and Lithium Americas on Tuesday morning, the goal for combining the businesses is “to establish market leadership” and to “reshape the current fragmented lithium development sector.”

Under the terms of the agreement, Chmelauskas will still head up Western Lithium, while Kanellitsas and Lithium Americas executives Franco Mignacco and Tom Hodgson will join Western Lithium’s board. Upon closing of the transaction, Western Lithium shareholders will hold 50.05 percent of the combined company, while Lithium Americas shareholders will own 49.95 percent.

Full details of the transaction will be included in the management information circulars of both companies, expected to be sent out in late July.  The companies expect to hold special meetings in August, and the transaction is anticipated to close in early September.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.

Related reading:

Western Lithium Up 30 Percent on First High-purity Lithium Production

Lithium Americas in Talks to Develop Commercial Scale POSCO Plant at Cauchari-Olaroz