News: LLL Ganfeng Lithium's Unit To Buy Up To 5% Stake In Mali Lithium, page-130

Further to my last post.

Ganfeng buying effectively 4% for US$65m is a very good price in todays environment, though I'd like to think we're not selling this unless they envisage having a future need for the funds, it effectively gives the JV an extra ~ US$152m (if we put in $65m for our 40% share, Ganfeng would need to put in ~ $87m for their 60% share). That is a big buffer, and like others I wonder why the JV would need so much funds? For all we know could be for some left ball thing.

IMO this transaction makes the likelihood of the Government applying the new mining code % of ownership entitlement less likely.

We were awarded our mining license under the old code so that should apply where the Government gets a free 10% and can buy another 10% at market rates, so this is the code that applies.

There has been speculation (in these threads) the Government wants to apply the new mining code to it’s ownership entitlement. As I say speculation because there is nothing to support this speculation. Under the new code the JV could lose up to 35% (compared to 20%). Now if this were to occur it would have a bigger effect on Ganfeng than us, because they own 60% compared to our 40%.

After the Govt takes 35%, there is 65% remaining to split 60/40 = 39% Ganfeng to leo 26%

This compares to 32.5% each under the original JV 50/50 ownership

So in this scenario, Ganfeng have paid all this money to gain an extra 6.5% ownership

Of course they’re not getting the full extra 10% anyway with the Government’s 20% ownership, however under the 35% scenario I can’t see them paying out this money for 6.5%. maybe the 1st 5% to give them control, but definitely not the 2nd 5%.

This is why I think this transaction confirms the Government’s entitlement (of 20%) is one of the things not being challenged in these negotiations.