Ann: Results of Scheme Meeting, page-41

from s t o c k h e a d::

IGO (ASX:IGO) and its partner in arms, China’s Tianqi, have been on the trail of lithium tiddler Essential Metals (ASX:ESS) since early this year, lobbing a premo $136 million bid for the lithium minnow.

Despite its relative obscurity — Essential’s sole spell as a miner was in a previous life as caesium producer Pioneer Resources — its Pioneer Dome project was a rarity, at the time of the deal’s announcement in January, as one of only 14 declared spodumene resources in Australia.

Given its all cash nature and more than 40% premium, the 50c per share offer felt like a foregone conclusion.

That is until billionaire Chris Ellison’s MinRes (ASX:MIN) stepped on the scene last week.

Tianqi and IGO seem to have been looking at Essential as either a beachhead to expand into a new lithium domain around Norseman in the Goldfields, some way from their Greenbushes mine near Bridgetown, or as potential feedstock for future expansions of their recently commercial lithium hydroxide processing plant in Kwinana.

But MinRes is a big dog in the region with its 50-50 JV with China’s Ganfeng at the Mt Marion mine nearby, and plans to move into downstream processing of lithium hydroxide for EV batteries.

After building up a 19.55% stake in Essential, disclosed last Friday, MinRes proved an effective blocker.

In a scheme vote today Essential fell well short of the 75% vote needed to approve its acquisition by TLEA, with holders representing just 31.53% of securities supporting the bid.

ESS and TLEA now have a day to reach an agreement on an alternative deal or either party can terminate it. TLEA can also terminate the agreement on the grounds ESS’ shareholders have not agreed to the scheme.

There’s no word yet on an alternative bid by MinRes. ESS said in a note to the ASX today that voting patterns changed significantly after MinRes starting buying shares up on-market at prices above the takeover offer.

“The Essential Board respects the wishes of the shareholders who voted against the Scheme and will now engage with TLEA to determine the next steps in accordance with the Scheme Implementation Agreement,” ESS chairman Craig McGown said.

“The Company will provide a more fulsome update on its forward plans for the Pioneer Dome Lithium Project in due course, noting that whilst the SIA remains in place, the Company cannot engage with potential strategic off-take partners and with Mineral Resources Limited, which recently acquired a 19.55% stake in the Company.

“Pioneer Dome is a strategic asset and one of few independently owned undeveloped lithium deposits in Australia. Following the recently completed Scoping Study, Essential believes that it remains in a strong position to unlock the value of this asset for its shareholders.”