Chris Ellison’s Mineral Resources has revealed it was blocked...

Chris Ellison’s Mineral Resources has revealed it was blocked from participating in a joint venture or initial public offering after meetings with Kali Metals and instead opted to go on a spending spree on the stock once the lithium play listed on the ASX.

MinRes emerged with a near 10 per cent stake in Kali Metals within two days of its debut.

Mr Ellison, through a private company, along with friends and acquaintances, piled into an extraordinary IPO that opened and closed in less than 20 minutes in November. The stampede for a piece of the action came after the lithium explorer opted not to allow any of the big corporates involved in a major land grab in Western Australia to take a cornerstone stake.

Chris Ellison’s MinRes has snapped up a big stake in Kali Metals. Trevor Collens

Shares, at one point up 99 per cent, closed at 43.5¢, up from 25¢, on Monday. The Kali share price continued to climb on Tuesday when it closed at 52.5¢. It rose further on Wednesday to close up about 45 per cent up at 76¢.

The MinRes stake was disclosed to the market before the start of trading and Kali later released a statement on preliminary exploration work on its tenements that showed the presence of lithium in rock chips.

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In response to questions from The Australian Financial Review, MinRes said it had several meetings with Kali over an extended period about the potential for involvement as a joint venture partner and MinRes’ participation in the IPO.

“Those approaches were declined,” a spokesman said. “Kali has been explicit about its decision to exclude companies such as MinRes from the IPO. MinRes then invested in Kali Metals at the earliest opportunity, which was on-market after the company listed.

“The MinRes investment in Kali Metals, which has assets in proximity to our Mt Marion and Bald Hill operations, is consistent with previous strategic acquisitions in numerous junior lithium companies with assets in the Goldfields and Pilbara regions. MinRes is confident these investments will deliver shareholder value over time.”

MinRes said its investment was in accordance with the company’s comprehensive corporate governance procedures, which in this case of Kali meant the investment was approved by chairman James McClements and not Mr Ellison as managing director.

“Managing director Chris Ellison is MinRes’ biggest shareholder, whose interests are fully aligned with all of our shareholders,” the spokesman said.

The MinRes share price slipped more than 6 per cent on Wednesday to close at $63. The stock was trading above $71 in the final days of 2023.

Mr Ellison invested in Kali through his private company, Wabelo, and emerging with a 4.86 per cent stake after the IPO to make him the third-biggest shareholder behind Kalamazoo Resources and Karora Resources, which combined to spin out Kali.

The MinRes substantial shareholder notice for Kali makes it clear that Mr Ellison’s 4.86 per cent stake is separate and unrelated to the MinRes 9.98 per cent stake.

Former MinRes director Tim Roberts owned 4 million shares, while Rod Jones, the co-founder of education group Navitas, had 3.5 million shares. They held the fourth and fifth spots on the list of the company’s 20 largest shareholders released last week.

Russell James, who works for MinRes and takes photographs that adorn the walls of its Perth headquarters, was also among the largest 20 shareholders in the company.

Kali holds big tracts of exploration ground in a lithium hotspot around Kalgoorlie and Norseman, where MinRes owns and operates the Mt Marion and Bald Hill mines. MinRes also has stakes in other lithium hopefuls active in the wider area, including Delta Lithium, where Mr Ellison is chairman, Bill Beament’s Develop Global and Global Lithium.

In addition, MinRes struck a deal last November where it will pay up to $60 million plus royalties to secure lithium rights to Pantoro Limited’s project near Norseman.

and I reckon CE will keep buying Kali shares on any dip