Not bad TOR plus MIN nearby with Bald Hill (A40)!

MinRes set to buy WA lithium mine Bald Hill

Sarah Thompson, Kanika Sood and Emma Rapaport

Sep 4, 2023 – 11.52am

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Chris Ellison’s Mineral Resources is the mystery bidder that has signed an implementation deed to buy West Australian lithium mine Bald Hill out of administration.

Street Talk understands MinRes has agreed to a period of exclusivity with Bald Hill’s administrators, McGrathNicol, and is expected to complete the deal in coming weeks. It would pay several hundred million dollars to buy the asset, sources said.

A spokesperson for MinRes declined to comment.

Billionaire Chris Ellison’s Mineral Resources is in advanced negotiations to purchase the Bald Hill lithium mine.

An implementation agreement was signed on August 30. The next step is for the share sale agreement to come into effect. Currently, it is facing some opposition from KordaMentha – the receivers and managers for Bald Hill’s owner, Alita Resources – which has questioned McGrathNicol’s authority in leading the sale.

The mooted deal comes amid a flurry of M&A activity in the lithium sector, both locally and offshore. Liontown Resources’ suitor Albemarle returned with a friendly $3 a share bid on Monday after being spurned by the target earlier in the year. Allkem is due to merge with Livent in a $15.7 billion deal, and Pilbara Minerals and Patriot Battery Metals have both been seeking partners.

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Long time coming

Bald Hill’s lithium and tantalum mine is located in WA’s Eastern Goldfields, and was hit by liquidity issues amid a commodity price slump in 2019. It was the primary asset of Alita Resources, which has been in administration for nearly four years, first via KordaMentha and then – starting in December 2020 – via McGrathNicol. Alita, which was previously called Alliance Mineral Assets Pty Ltd, was once listed on the ASX. (KordaMentha is currently the receiver and manager).

Since its administration, Alita has seen several changes to its capital structure including lenders trading their debt, attempts to recapitalise the business, and a sale via a debt-for-equity swap.

Among them was Tribeca Investment Partners, which ended up selling its debt to then ASX-listed Galaxy Resources. (Galaxy merged with Orocobre to form Allkem, which is now due to merge with NYSE-listed Livent). Hong Kong-based alternatives manager OCP Asia and Alex Turnbull’s hedge fund Keshik Capital were also around the situation back in 2019.

The latest was an attempt by its Chinese-linked lender Austroid Corporation to buy Alita as an alternative to liquidating it. However, Austroid’s proposal was blocked by the Treasury and the Foreign Investment Review Board in July – clearing the way for MinRes to swoop in.

KordaMentha, on September 1, questioned McGrathNicol’s power to lead the sale when it had security over Bald Hill. It added it had received more than 10 approaches from potential acquirers in the past 10 months, and that the existing deed of company arrangement – even though shot down by the Treasury – wouldn’t be voided until September 5.