AFR article on AZLs acquisition of Canada's Prairie Lithium

https://www. copyright link/street-talk/battery-metals-play-arizona-lithium-stumps-up-80m-for-canadian-peer-20221215-p5c6kd

It’s M&A time at ASX-listed explorer Arizona Lithium.

Street Talks understands Arizona is set to buy Canada’s Prairie Lithium for about $80 million, to sit alongside its Big Sandy project, in a deal expected to be announced as soon as Wednesday. Arizona’s shares were halted on Monday morning citing an unnamed acquisition.


Street Talk. Brendan George /NYT.

Arizona was expected to stump up the purchase price in a 50-50 cash and scrip mix. Sources said Prairie would be about 15 per cent of the combined business.

Arizona Lithium could not be reached for comment.

Prairie was incorporated in 2019 by former energy consultant Zach Maurer and is an unlisted business, with some private equity backers (who are now headed for non-substantial stakes on Arizona’s register). It drilled its first holes only last year in the Williston Basin in Saskatchewan, Canada.


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Its appeal to Arizona was understood to be two-pronged: a large lithium brine resource that rivals that of $1.2 billion market capitalisation Lake Resources, and the ability for Prairie to start producing faster (albeit iteratively) than Big Sandy.

Prairie has 4.1 million tonnes of lithium carbonate equivalent, which is not far off Lake Resources’ 4.4 million tonnes at Argentinian project Kachi and NYSE, Frankfurt and Toronto-listed Standard Lithium’s 4.3 million tonnes.

Being a lithium brine resource, Prairie’s production could come online sooner in smaller increments than Arizona’s flagship project, Big Sandy, which is a sedimentary clay deposit and not expected to start production until 2027-28.

Of course investors would be drilling into the specifics of Prairie’s comparison with bigger and more advanced projects, as well as the bill to get it into production. But as of Monday evening, the Canadian arrival’s headline resource was enough to get a few tongues wagging.

Prairie is understood to have fallen on Arizona’s radar via the latter’s lithium research centre in Tempe, Arizona.

Its founder, Maurer, was expected to get a board seat at Arizona. Arizona last raised in March via Evolution Capital and PAC Partners. It had a cash balance of $50 million, which investors expected it to fund half of the acquisition.

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Anthony Macdonald co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@copyright link
Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@copyright link
Kanika Sood is a journalist based in Sydney who writes for the Street Talk column. Email Kanika at kanika.sood@copyright link.au