Ann: IGO: Lithium Joint Venture to Acquire Essential Metals Limit, page-81

From atom99 - A40

This $136m lithium deal may be just thestart

Peter KerJan 9, 2023 –10.34am

IGO and Tianqi have movedinto a new lithium neighbourhood. none

Butperhaps more notably, the Bald Hill lithium mine is about 60km northeast of thetenements and its future remains mired inuncertainty.

BaldHill has been in the hands of administrators since August 2019 when its ownerAlita Resources collapsed.

FIRB rejection

Apreliminary deal to sell the mine to a Chinese-backed company in 2019 failed towin approval from Australia’s Foreign Investment Review Board.

Receiversthen sought to sell the mine to US-registered Austroid, which had common linksto the Chinese company involved in the failed 2019 deal.

TheMorrison government did not approve Austroid’s application and Austroid lodgeda revised FIRB application last year for the new Labor government to consider.

Basedon the most recent disclosures to the Singapore exchange by Alita and to ASICby receivers McGrathNicol, the sale of the Bald Hill mine to Austroid still hasnot secured final FIRB approval.

Thesale agreement has a sunset date of January 31, meaning IGO and Tianqi’s pushinto the proverbial lithium neighbourhood could be well-timed.

Priced at 36pc premium

Directorsof Essential Metals have unanimously recommended that shareholders vote infavour of the offer, which will see IGO and Tianqi pay 50¢ for each Essentialshare.

Theoffer is priced at a 36.3 per cent premium to Essential’s share price over thepast 40 days.

Essentialshares fetched 21¢ this time last year and the stock was as low as 9¢ in June2021.

IGObought 49 per cent of Tianqi’s Australian lithium assets in late 2020 under adeal that pushed IGO’s nickel and gold portfolio more toward battery minerals.

Thelithium joint venture between IGO and Tianqi owns 51 per cent of theGreenbushes mine, with US producer Albemarle owning the remaining 49 per centof the mine.

Thesituation means Tianqi effectively owns 26.01 per cent of the Greenbushes minewhile IGO owns 24.99 per cent.

The twocompanies also share a lithium hydroxide processing plant south of Perth atKwinana, where concentrated lithium from Greenbushes is turned into highervalue lithium hydroxide for batteries.

IGOowns 49 per cent of the Kwinana plant while Tianqi owns the rest.

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