Patriot Battery Metals taps Macquarie Capital for a deal
Patriot Battery Metals is understood to have tapped Macquarie Capital, with sources suggesting the investment bank has been sounding out potential buyers of the $741m Canadian lithium explorer.
It comes after DataRoom reported in February that the company, known to have an attractive stable of assets, had attracted interest from Mineral Resources, Pilbara Minerals and Wesfarmers. Rio Tinto also took a look, but Pilbara Minerals was keenest. Market interest is now being tested.
Patriot Battery Metals is chaired by former Pilbara boss Ken Brinsden.
The company is listed in both Australia and Canada, and focuses on a range of metals.
Its market value has almost halved since the start of this year, in line with the falling lithium price, down to $742m from $1.55bn ($C1.45bn).
Pilbara Minerals recently hired Macquarie Capital investment banker John Stanning as its chief development officer.
Pilbara chief executive Dale Henderson has not ruled out a move on Patriot Battery Metals.
The $15bn Pilbara Minerals is currently working on finding a joint venture partner for the construction of a processing facility with Macquarie Capital, but sources say it could acquire Patriot Battery Metals while also carrying out a joint venture deal.
There has been merger and acquisition activity in the lithium space over the past few years.
Last month, Australian listed lithium player Allkem struck a $US10.6bn merger with New York-listed Livent.
That came hot on the heels of Liontown Resources rejecting a $US3.7bn takeover bid by mining giant Albemarle.
Brisbane-based Allkem was created through a merger of producers Orocobre and Galaxy Resources in 2021.
Some wonder whether the $390m Meteoric Resources will become a target for the $6.7bn Lynas Rare Earths.
Last week, Macquarie analysts said lithium and rare earth prices had stabilised after a recent correction.
They lowered their lithium and rare earth price forecasts by 9 to 15 per cent to reflect weaker spot prices in the second quarter of this year.
The analysts said that Mineral Resources and Pilbara Minerals were its preferred Australian producers.
Tianqi remained their key pick among Chinese producers.
They also, in turn, lowered their earnings estimates for lithium producers including Mineral Resources, Pilbara Minerals, IGO, Allkem, Core Lithium and Sayona Mining.
They cut prices for neodymium and praseodymium (materials used in ultra-strong magnets, and in electronics, technology and automotives) by 14 per cent to $US84.4 per kilogram and lowered their spodumene price by 9 per cent to $US4837 a tonne.
https://www.theaustralian.com.au/business/dataroom/patriot-battery-metals-taps-macquarie-capital-for-a-deal/news-story/60567c8ec87433475fa0c334e77c3125
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