TAW - The Next Lithium Producer led by Mr Pegmatite, page-1895

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2017 China Top Ten cross-border mergers and acquisitions in the field of lithium



Lithium resources have become the key elements to seize the layout of the electric car market.
Recently, the Ministry of Finance, the State Administration of Taxation, the Ministry of Industry and Information Technology and the Ministry of Science and Technology jointly issued the "Notice on Exempting New Vehicles from Purchase of Vehicles for New Energy Vehicles", specifying that from January 1, 2018 to December 31, 2020, Energy vehicles exempt vehicle purchase tax. New energy vehicles tax-free policy of great positive, but also to some extent reduce the comprehensive purchase of new energy vehicles cost, improve the new energy vehicles compared to the traditional fuel-efficient vehicles of the overall cost.
Since 2014, the sudden emergence of China's new energy automotive market has brought a series of chain reactions to the entire industrial chain.

In the new energy vehicles, "three" in the motor, electronic control of the higher technical requirements, while the battery as the core of the three electrical technology, the dependence on raw materials is more demanding. Currently on the market the mainstream electric car battery also uses lithium batteries, such as Tesla with ternary lithium battery, BYD e6 with lithium iron phosphate batteries. Can be seen, lithium resources have become the key elements to seize the layout of the electric car market.

Data show that from 2011 to 2016, the total annual compound growth rate of lithium consumption reached about 10%. In addition, domestic lithium resources have been partitioned by Tianqi Lithium Industry (002246.SZ), Western Resources (600139.SH), Tibet Mining (000762.SZ) and other industry giants. Moreover, the domestic resources exploitation is difficult and the lithium resources are increased Scarcity, leading to high prices of lithium. Chinese-funded enterprises through the overseas mergers and acquisitions layout of lithium resources upstream, is conducive to enterprises to maintain the stability of raw material prices.

According to the battery China Network recently reported that due to the reasons for mineral reserves and production capacity, China relies heavily on lithium resources abroad, of which 70% need to be imported overseas. According to the data of the US Geological Survey, the output of lithium ore worldwide is mainly contributed by Chile and Australia. The output of both will reach 26,300 tons in 2016, accounting for 75.14% of the global total. At present, the reserves of proven lithium resources in the world are estimated at 48.46 million tons in terms of metal lithium. Among them, Chile, Bolivia and Argentina account for 33.02%, 18.57% and 13.41% of the total reserves, respectively, accounting for nearly the total Two-thirds of the world's reserves. Visible for new energy enterprises in China, the upper reaches of lithium resources have an extremely important significance.

According to the incomplete statistics of Morning Post Group Research Department, in 2017, Chinese-funded enterprises laid out nearly 20 lithium resource projects overseas. They acquired the stake in lithium mining enterprises and signed the takeover agreement in two ways, mainly based on the former. As of December 28, 2017, there were 18 certainty deals (mergers and acquisition announcements, mergers and acquisitions, mergers and acquisitions, and M & A deals) of Chinese-funded enterprises overseas in the layout of lithium resources projects, of which 15 disclosed amounts involving approximately RMB3,748 million. Rumor has it that GSR Capital is bidding for a stake in Chilean Chemical Mining Company (SQM), one of the world's largest lithium battery suppliers. According to Reuters data, SQM's market capitalization is about $ 15 billion, which means the 32% stake is worth about $ 4.8 billion.

Specifically, the most important acquisition of overseas lithium ore is the Chinese-funded enterprises are followed by the mineral deposits in Tibet Everest (600338.SH), China Resources (002738.SZ) as the representative of the mineral industry, its purpose is to increase by industry Chain to open up new business leads and enhance the reserves of mineral resources to enhance the company's core competitiveness; followed by Gan Feng Lithium (002460.SZ), Tian Qi Lithium Industry, Accor Group (002497.SZ), Jiang Electric (002176.SZ) as the representative of the lithium metal production suppliers, through the layout of overseas lithium resources, combined with the layout of the domestic lithium stock, lithium materials for the production capacity to provide protection of raw materials supply, through the downsizing of raw materials to reduce procurement costs and enhance the product Profitability; There Meng Meng Technology (002684.SZ), the Great Wall Motor as the representative of the battery companies and vehicle and parts companies to buy lithium ore overseas purpose is to achieve the layout of the upstream and downstream industry chain to make the groundwork, Locking the supply of raw materials upstream to avoid the upstream supply of raw materials, the adverse impact on the company's business development. The investment agencies represented by Jinsha River Capital and Gemstone Investment are also on the lookout for foreign lithium resources.

It is worth noting that there are many uncertainties about whether the overseas acquisition of lithium resources can bring real profit growth or reach the scale of enterprises or reserves of mineral resources. In fact, with the appearance of companies such as ST Zhonghe (002070.SZ), Salt Lake Stock (000792.SZ) and other companies that have reserves of lithium reserves in China that differ substantially from the expected target, the lithium resources The holding and realization of its shipments and earnings may be far apart.
The following is a summary of 10 representative cross-border mergers and acquisitions conducted by the Research Department of the Morning Whistleblower Group based on transaction amount, M & A decision-maker and its influence in the industry.

1.365 billion yuan in Tibet's Mount Everest acquisition of Canadian company LithiumX Energy Corp.
December 18 this year, Mount Qomolatin announced that its overseas shareholding company NNEL, intends to focus on lithium resources exploration and development of Canadian company LithiumX Energy Corp, the total cash consideration for the acquisition of not more than 265 million Canadian dollars (13.65 billion yuan Yuan), the acquisition of funds by the joint-stock company to own or self-pay.

Tibet Everest holds a 45% stake in NNEL and provided NNEL with a maximum of $ 265 million in financing quota and issued a financing commitment letter. LithiumX Energy Corp is an overseas listed company that focuses on the exploration and development of lithium resources. Its core assets are the SDLA Lithium Project of its wholly-owned subsidiary. The project contains high-quality lithium ore with a resource of not less than 2 million tons of lithium carbonate equivalent.

According to the announcement of Tibet's Everest, the acquisition will help its investment and layout of lithium resources industry, upgrade its resources strategy and enter into the development of new resources and upstream resources to improve its ability to withstand the cyclical risks in the non-ferrous metals industry. If the acquisition is completed, it will be delivered in 2018, which will benefit the Company's sustainable development and enhance its core competitiveness in the long run.
Gan Feng lithium industry 11170000000 yuan successively three times the acquisition of overseas lithium ore

January 17 this year, Gan Feng Lithium Industry Announcement, the company wholly owned subsidiary of Gan Feng International to 6,375 Canadian dollars (3.24 billion yuan) acquisition of 19.9% stake in the Americas lithium industry, and access to the Americas lithium board seats, and promised to Americas Lithium offers no more than $ 125 million in development loans.

It is reported that American Lithium is a Canadian resource company with a 50% interest in the Caui-Olaroz lithium project in Jujuy province, Argentina and a 100% interest in the Lithium Nevada project in Nevada, USA.

Gan Feng Li industry, said the transaction is to extend the layout of the company in the lithium industry chain integrity and enhance the long-term competitiveness of the company, will directly provide the necessary lithium resources for the development of the company.

April 7 this year, Gan Feng Lithium Industry announced that its wholly owned subsidiary of Gan Feng International with its own funds not exceeding 96.00108 million US dollars (661 million yuan) acquisition of RIM Australia less than 13.8% stake. Before the completion of the acquisition, the company holds 43.1% stake in RIM, the acquisition will be completed, the company will hold no more than 56.9% stake in RIM.
RIM is a diversified mining and exploration company in Western Australia. Founded on August 11, 2009, RIM owns a 100% stake in the Mt Marion spodumene project and was commissioned in February 2017.
On April 28, 2005, Ganfeng Lithium Co., Ltd. subscribed no more than 5% of its equity interest in Pilbara Minerals, an Australian lithium exporter, for a consideration of not more than US $ 20 million (RMB132 million).

Pilbara Minerals, which claims the company's Pilgangoora lithium-tantalum project is one of the largest new lithium deposits in the world. According to the latest Mineral Resources Report released in July 2016 and the drill-in results, the project measured, indicated and inferred resources of 128.6 million tonnes, 1.22% of Lithium Dioxide, 138 ppm of Tantalum Pentoxide, including 157 10,000 tons of lithium oxide and 39 million pounds of tantalum oxide. The mine completed the feasibility study of certainty in September 2016. And beginning construction of Pilgangoora by the end of 2016, mine life expectancy is 36 years.
Gems invested 276 million yuan acquisition of Baccarat Minerals 19.89% stake

On December 15, 2017, Bacanora Minerals, a lithium-listed lithium company listed in both London and Canada, announced that Gems Investments acquired its 19.89% stake in a total amount of 31 million pounds (approximately RMB 276 million ) To raise funds for the development and construction of the Sonora lithium mine in Mexico.

Founded in 2010, Gems Investment is headquartered in Beijing and focuses on markets both at home and abroad with a managed fund of approximately RMB20 billion. Focus on TMT, resources, environment and consumer areas.

Gems Investment will be the first phase of the mine put into operation, each year 5,000 tons of lithium carbonate underwriting rights, the second phase of a total of 15,000 tons of lithium carbonate per year. According to the latest feasibility study report, Sonora Mine lithium carbonate annual production capacity of 3.5 million tons, the project net present value of 1.253 billion US dollars, the internal rate of return of 26.2%, lithium carbonate production costs 3910 US dollars per ton.

Great Wall Motor 146 million acquisition of Australia Pilbara Minerals not more than 3.5% stake
On September 29, Great Wall Motor announced that its indirect wholly-owned subsidiary Billion New Development subscribed not more than 3.5% of the equity interest in Australia's Pilbara Minerals for a total consideration of A $ 28 million (approximately RMB146 million). After the completion of this subscription, , Billion New Development will hold no more than 3.5% stake in Pilbara Minerals.

According to the announcement, Pilbara Minerals owns a 100% interest in the Pilgangoora Lithium Project located 120 km south of Port Hedland in Western Australia. The first phase of the project is expected to produce 300,000 tonnes of spodumene concentrate per year. It is estimated that in 2018 Half a year put into operation, the second phase of the project is expected to put into operation in the first half of 2020.
This also means that this is well-known in the country to produce SUV car business, began to fully involved in lithium battery raw materials and minerals. The transaction will play a good role in promoting Great Wall's strategic development in the layout of new energy vehicles and will provide a resource guarantee for the Company's new energy automotive industry chain.

Jiang Te motor 104 million acquisition of Australian listed miner Tawana 11.45% stake
October 19, 2017, Jiang motor (002176, SZ) announced that the company through a wholly owned subsidiary Germany Wei Er participated in Tawana, an Australian listed mines and issued an additional 11.45% stake in Wells will be 0.35 Australian dollars per share Tawana subscribed for about 57,142,900 new shares, the transaction amount of 20 million Australian dollars (equivalent to about 104 million yuan) to become its largest shareholder.

According to the information, Tawana is a listed company of Australian Securities Exchange (ASX) and its main business is exploration and development of lithium ore, tantalum ore and iron ore. As of June 30, 2017, Tawana had total assets of approximately A $ 36,534,800, total liabilities of A $ 4,888,600, A $ 31,652,200 net worth, operating income of A $ 29,800 and operating profit of A $ -50,779,000. The company's principal holdings are a 50% interest in the Bald Hill project in Western Australia and a 100% interest in the Cowan lithium project.

Prior to Tawana Jiang Jiang Electric Co., Ltd. has been providing joint venture lithium concentrate raw materials, the acquisition is completed, the relationship between the stability of the supply of Jiang Te further provide protection, but also to ensure that the joint venture Jiang Jiang Electric Co., Ltd. Baojiang lithium carbonate production Lithium, lithium hydroxide lithium concentrate supply.

Baowei Holdings 99.31 million yuan acquisition of Australian mining company AMAL15.56% of the issued share capital

On October 4, 2017, Barrow Holdings (00024.HK) announced that its wholly-owned subsidiary, BCL, subscribed for 15.56% of the issued share capital of AMAL, an Australian mining company, for A $ 19.575 million.

AMAL is an Australian mining company specializing in the development and mining of lithium, tantalum resources and related products listed on the SGX-ST. AMAL owns the interest in lithium and tantalum ore in Bald Mountain, Western Australia and owns 50% of the lithium project in it. As of June 30, 2017, AMAL's net assets were approximately A $ 14.4 million.

Baowei Holdings Limited, a holding company engaged in the steel trading business, property leasing and development and iron ore mining, was established in Hong Kong in 1949 and is principally engaged in the trading of steel and was formally established in Hong Kong Stock Exchange in 1989 Listed and listed on the Singapore Exchange in 1990.

85.69 million yuan of dry-land transportation in Qingdao acquired 19.9% shares of the Australian Agosa mining industry

On August 17, 2017, Agosa posted a notice on the ASX that Qingdao Sinotrans acquired a 19.9% stake in Australian company Agosa for A $ 16.9 million.

Argosy Minerals, an Australian listed company, signed a binding investment and takeover agreement with Qingdao Dry Transport and jointly developed the development of Agosa in the Linkang project, which produces 10,000 tons of lithium carbonate , The final development cost of the project is about 130 million U.S. dollars, which is more than the estimated expenditure that Agosa plans to spend in the second stage of the Rincon Lithium Project in Argentina.

Official website shows that Qingdao Qian Yun is a technology-intensive enterprise that develops and produces high-tech new materials. Lithium manganese oxide, lithium iron phosphate, ternary materials as the starting point for the current large-scale power batteries, energy storage batteries, large uninterruptible power supply and laptop batteries, cell phones and other lithium-ion batteries to provide supporting the supply of products. Prior to this, Qingdao Qian Yun also invested in the lithium mine project of Mineral Resources, another lithium mining company listed on the ASX.

Hurray Cobalt 68.42 million yuan acquisition of AVZ Australia 11.2% stake

August 13, 2017, Huayou Cobalt announced that a wholly owned subsidiary of the company Hurray International Mining (Hong Kong) Limited and Australia AVZ signed a share subscription agreement, Hurray International Mining to A $ 13,200,000 (equivalent to about 6842 Million) subscribe for 186 million new shares issued by AVZ. Upon completion of the transaction, Hurray International Mining will receive 1,886 shares of AVZ additional conversion options, accounting for 11.2% of the total issued share capital of AVZ.

It is understood that AVZ is a company listed on the ASX. Its main business is mineral exploration in Africa, including exploration for copper, vanadium, lead, zinc, lithium, tin and gold. AVZ owns 60% interest in the Manono lithium mine project in the DRC. The Manono Lithium Project is located 500 kilometers north of Lubumbashi in southern Congo, with a total area of 188 square kilometers. Manono Lithium Project is a exploration rights project, there is some prospecting potential of lithium resources.

The AVZ acquisition of this company is Hurray cobalt long-term development strategy for the arrangements for the promotion of resource development strategy in Africa, the company is conducive to the development of lithium new energy materials lithium resources necessary for the development of lithium new energy materials business to provide a reliable resource protection There's important meaning.

China Mining Resources 50.781 million yuan acquisition of 11.14% shares of Australian PSC

On November 8, 2017, China Mineral Resources (002738.SH) announced that it has subscribed for 200 million shares of Australian PSC through its wholly-owned subsidiary, Hong Kong China Mines, for A $ 10 million (approximately RMB50.781 million) The company's total share capital of 11.14%.

PSC owns 70% of Arcadia Lithium in Zimbabwe, which is 43.2 million tonnes compliant with the JORC Code (2012 edition). While Hong Kong Zhongmian obtained part of the product underwriting rights of the Arcadia Lithium Project, which sold 390,000 tonnes of spodumene concentrate (Li2O 6%) and 1,097,000 tonnes of Li2O 4%).

Official website shows China Resources as the first large-scale non-ferrous metal industry "go global" geological exploration technology services company, out of the market experience, customer resources, has a strong first mover advantage. At home and abroad, the company has more than 20 subsidiaries under its control. It has formed a good market reputation and ranks first in the overseas market share of China's non-ferrous metal exploration technology services.

The mergers and acquisitions are also conducive to increasing reserves of mineral resources for lithium reserves and international trade business, and become the company's main business of mining investment and development of new growth points, expanding the company's industrial chain, but also help to play the company's minerals Exploration of technological advantages, the integration and expansion of the upstream and downstream industry chain.

Mengshi Technology 15 million acquisition of Canadian lithium exploration company Metalstech
On December 12, 2017, Lion Technologies signed a binding agreement with Metalstech (referred to as MTC), a Canadian lithium exploration company, to subscribe for the latter's 10 million shares. MTC announced on the Australian Stock Exchange that it has entered into a strategic investment transaction with Lion Technologies. Meng Lion Technology Mole 10 million shares of MTC at an Aussie price of 30 cents per share for a total investment of 3 million Australian dollars (about 15 million yuan). MTC has multiple lithium projects in Quebec, Canada and plans to build lithium carbonate and lithium oxide plants.

With a market capitalization of more than 10 billion yuan, Lion Technologies claims to invest 3 billion yuan to build high-end lithium-ion battery businesses and has the capability to produce various types of high-end automotive battery products such as cylinders, square aluminum housings and soft bags. Lion technology has been built in Fujian Zhaoan and Hubei Yicheng built two large lithium-ion battery production base. In addition, Mengshi technology in the energy storage business also has rapid development, in addition to investing in a number of large-scale energy storage project construction projects, Mengshi technology in the domestic new energy vehicles business also have a greater breakthrough, and Dongfeng Yulon joint release Self-developed Yu Road EV2.