Charger Metals

Lithium Australia Signs Binding Agreement For A$2.0M Sale of the Lake Johnston Lithium Project

Lithium Australia Ltd. (ASX:LIT) (“Lithium Australia” or the “Company”) is pleased to announce that it has entered into a binding agreement with Charger Metals NL (ASX:CHR) (“Charger”) for the sale of the Company’s remaining 30% interest in the Lake Johnston Lithium Project (“Acquisition Agreement”). Completion of the sale reinforces the Company’s continued focus on its core operations, while also strengthening its balance sheet.


HIGHLIGHTS

  • Lithium Australia have signed a binding agreement with Charger Metals NL (ASX:CHR) for the sale of Lithium Australia’s remaining interest in the Lake Johnston Lithium Project
  • Charger Metals will pay a A$2.0m cash consideration for Lithium Australia’s remaining 30% holding in the Lake Johnston Lithium Project, which includes a non-refundable exclusivity payment of A$0.15m
  • Completion of the acquisition of the Lake Johnston Lithium Project will be subject to approval from Charger Metals’ shareholders at an upcoming general meeting
  • Lithium Australia retains a first right of refusal for offtake for up to 30% of lithium produced by the Lake Johnston Lithium Project as part of the binding agreement for future commercial production of lithium ferro phosphate (LFP)
  • The transaction supports Lithium Australia’s transition away from non-core assets, while also strengthening the Company’s balance sheet
  • Lithium Australia maintains a holding of 9.6m ordinary shares in Charger Metals
Under the Acquisition Agreement, Lithium Australia has agreed to sell, and Charger has agreed to acquire:

(a) the Company’s remaining 30% interest in the Lake Johnston Lithium Project tenements; and

(b) the Company’s remaining 30% interest in the contractual rights to the lithium in the tenements comprising the Lake Johnston Lithium Project.

In consideration for the sale of the remaining 30% interest in the Lake Johnston Lithium Project, Charger will pay Lithium Australia A$2.0m in cash. The payment will be structured with a A$0.15m non-refundable exclusivity payment paid within two business days of signing the Acquisition Agreement, and A$1.85m on completion.

Completion of the Acquisition Agreement, which must be satisfied on or before 28 February 2024, will be subject to, amongst other items, the approval of Charger’s shareholders at its upcoming meeting pursuant to Item 7 of Section 611 of the Corporations Act 2011 (Cth) and ASX Listing Rule 10.1, and a New Investor entering into an agreement with Charger to become an investor in the Lake Johnston Lithium Project with such agreement remaining in full force and effect at Completion. This New Investor was announced by Charger today as Rio Tinto Limited (ASX:RIO).

Comment from Lithium Australia CEO & Managing Director, Simon Linge

“We are excited by the opportunity to engage with Charger Metals regarding the sale of Lithium Australia’s remaining holding in the Lake Johnston Lithium Project. As a significant shareholder of Charger, we are excited by the partnership between Rio Tinto Limited and Charger and believe this provides a win-win outcome for all.

The transaction reaffirms our commitment to focusing on our core operations, while aligning the Company to its ESG ambitions. Lithium Australia also retains optionality to secure any future lithium offtake from successful resource development to support our battery materials business. I am excited by our future prospects and believe this transaction will help us to lead and enable the global transition to sustainable electrification.”

As part of the Acquisition Agreement, Lithium Australia will also receive a conditional first right of refusal over the lithium product produced from the tenements. The first right of refusal covers lithium product equal to the lower of:

  • 30% of the lithium product produced on the relevant tenements for the term of the agreement reached for offtake, should a binding agreement be reached; and
  • The lithium product required by Lithium Australia to produce lithium metal phosphate product through a commercial facility(s) in which Lithium Australia has an ownership interest of 25% of more.

To qualify for the first right of refusal, Lithium Australia must make a financial investment decision announcement prior to 31 December 2030 to construct a commercial facility to produce lithium metal phosphate cathode powders, such as LFP.

The first right of refusal provides a path to future lithium access to be applied in the commercial production of LFP and enhances third party discussions related to the development of this technology.

The sale of the Lake Johnston Lithium project underscores the Company’s greater focus on core operations of lithium chemicals, battery materials, and battery recycling. This transaction represents Lithium Australia’s ongoing commitment to decarbonise lithium production. The cash proceeds of the transaction, coupled with the Company’s 9.6m shares held in Charger, strengthen Lithium Australia’s balance sheet, placing it in a stronger position to meet its growth objectives.


Click here for the full ASX Release

This article includes content from Charger Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.

CHR:AU
The Conversation (0)
Glowing digital battery icon with particle connections on dark background.

CATL Mine Restart Pressures Australian Lithium Market

Australia’s lithium sector is facing pressure on the back of news that Chinese battery giant Contemporary Amperex Technology (CATL) (SZSE:300750,HKEX:3750) is expected to resume production at its Jianxiawo mine.

Operations were halted in August when the mine’s licence expired, with the suspension expected to last three months.

Located in Yichun, Jiangxi province, Jianxiawo produces about 65,000 tonnes of lithium carbonate equivalent annually, roughly 6 to 8 percent of global supply. It is the largest mine in Yichun, often referred to as China’s “lithium capital.”

Keep reading...Show less
International Lithium (TSXV:ILC)

International Lithium Corp.


Keep reading...Show less
Blue lithium-ion battery over shiny surface.

How to Invest in Lithium Stocks and the Lithium Market

Despite the current low price environment, the long-term demand for battery metals is robust and offers opportunity for those interested in lithium stocks.

Seasoned metals investors who want to look beyond gold and silver are getting involved, while new investors are being drawn in by expanding battery market and lithium supply deals between automakers and lithium producers.

Whatever the reason, it’s important to get familiar with the lithium market before investing in lithium stocks. Here's a brief overview of some of the basics, including supply and demand, prices and companies.

Keep reading...Show less
Andrada Mining

New mineralised pegmatites identified at Lithium Ridge as exploration drilling commences with SQM

Andrada Mining Limited (AIM: ATM, OTCQB: ATMTF), the critical minerals producer with mining and exploration assets in Namibia, is pleased to announce the commencement of exploration drilling at the Lithium Ridge project in partnership with Sociedad Química y Minera de Chile SA through its subsidiary SQM Australia (Pty) Ltd ("SQM"). (See announcement dated 9 September 2024 and 28 February 2025). This milestone represents part of the stage 1 workplan of the three stage earn-in agreement with SQM. Under this first stage, SQM will fund up to US$7 million in exploration to secure an initial 30% interest at project level with the potential to fund up to US$40m million over the three stages.

Keep reading...Show less
Gina Rinehart, executive chair of Hancock Prospecting, stands in front of cherry blossom trees.

Inside Billionaire Gina Rinehart's Key Mining Investments

Australian billionaire Gina Rinehart has become a formidable force in the global mining industry.

After taking the helm of her father’s iron ore firm Hancock Prospecting in 1993, she embarked upon a diversification strategy that has vastly expanded her resource empire. Now Australia’s richest person, Rinehart has investments in many of the world’s most strategic commodities such as lithium, rare earths, copper, potash and natural gas.

One of those investments is Arafura Rare Earths (ASX:ARU,OTC Pink:ARAFF), which even in a low price environment for rare earths managed to secure nearly AU$1.5 billion in debt financing in mid-2024 to advance its Nolans project in the Northern Territory. With a 10 percent equity stake, Rinehart’s Hancock Prospecting is Arafura's largest shareholder.

Keep reading...Show less
Democratic Republic of Congo flag waving against a clear blue sky.

Billionaire-backed KoBold Metals Secures DRC Licenses in Push for Manono Lithium

KoBold Metals, a US-backed mining firm supported by billionaires Jeff Bezos and Bill Gates, has received seven new permits to explore for lithium in the Democratic Republic of Congo (DRC).

The DRC mining registry confirmed on Wednesday (August 27) that the permits cover ground in both the Tanganyika and Haut-Lomami provinces, including four in Manono territory, home to the massive Roche Dure lithium deposit.

The approvals follow a July agreement between KoBold and the DRC government that positioned the company to acquire and develop the disputed Manono project, considered one of world's largest untapped lithium deposits.

Keep reading...Show less

Latest Press Releases

Related News

×