US Elemental Inks US$571 Million SPAC Deal to List Lithium Asset on Nasdaq

Australia’s Jindalee Lithium (ASX:JLL) is spinning out its massive US asset portfolio into a newly formed company that will list on the Nasdaq via a US$571 million blank-check merger.

The newly formed entity, US Elemental, will merge with Constellation Acquisition, a special purpose acquisition company (SPAC) sponsored by affiliates of Antarctica Capital, a New York-based investment firm with over US$10 billion in assets under management.

At the core of the transaction is the McDermitt lithium project in Oregon, widely considered one of the largest undeveloped lithium deposits in the US.

Along with the Clayton North project in Nevada, the assets are currently held by HiTech Minerals, a wholly-owned subsidiary of the ASX-listed Jindalee.

“Establishing US Elemental as a US-listed company represents an important milestone in unlocking the value of our U.S. lithium assets,” Ian Rodger, CEO of Jindalee and incoming CEO of US Elemental, said in a statement.

“We believe the McDermitt project is one of the largest lithium resources in the United States, and this Transaction is expected to position the Company to access the capital and strategic partnerships needed to advance development,” Rodger added.

The McDermitt project boasts a staggering mineral resource of approximately 21.5 million metric tons of lithium carbonate equivalent (LCE).

According to a recently completed pre-feasibility study, the asset is projected to support a 63-year mine life. During its first decade of operations, the site is planned to produce roughly 47,500 metric tons of lithium carbonate annually.

The project economics outline an estimated US$3.2 billion net present value (at an 8 percent discount rate) and a 17.9 percent post-tax internal rate of return.

Despite spinning out the assets into a US-listed vehicle, Jindalee intends to retain tight control. The Australian parent company will roll 100 percent of its equity interest into the new entity, expecting to hold approximately 80 percent or more of US Elemental post-close, subject to customary adjustments and SPAC shareholder redemptions.

To fund the next phase of technical studies and permitting, the transaction contemplates a concurrent capital raise of US$20 million to US$30 million. This includes a US$4 million private investment in public equity (PIPE) anchored by affiliates of Antarctica Capital, alongside potential third-party investors.

Post-transaction, US Elemental is projected to hold roughly US$15 million in cash on its balance sheet, net of deal expenses.

For Constellation and its sponsor, the merger capitalizes on the structural supply deficits looming over the battery metals sector.

“We believe US Elemental offers investors exposure to a significant US lithium resource at an important time for the industry,” Chandra Patel, Chairman and CEO of Constellation and Managing Partner of Antarctica Capital, stated.

“Demand for battery materials continues to grow and there is increasing emphasis on developing domestic sources of supply. The McDermitt Project, combined with the team’s experience and the scale of the resource, creates a strong platform for long-term growth.”

The deal remains subject to regulatory and shareholder approvals, as well as a minimum cash condition of US$14 million.

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