Tianqi Lithium Energy Australia (TLEA) has made a A$136m ($94.07m) offer to acquire Australian lithium exploration company Essential Metals, via a Scheme of Arrangement.
TLEA is a lithium joint venture (JV) owned by Tianqi Lithium Corporation (TLC) (51%) and Battery minerals producer IGO (49%).
In this regard, TLEA signed a scheme implementation agreement (SIA) to purchase 100% of the issued capital of Essential Metals, for A$0.50 per share.
According to the SIA, TLEA and Essential Metals have to reach an agreement to provide the latter’s shareholders with an opportunity to vote on the proposed scheme.
In the absence of a superior proposal and subject to favourable independent expert opinion, Essential unanimously recommends its shareholders vote in favour of the scheme.
ESS owns a 100% stake in the 450km² Pioneer Dome Project, located near the Mount Marion and Bald Hill lithium projects in Western Australia.
The company also owns stakes in other early-stage exploration projects across lithium, nickel and gold.
Essential managing director Tim Spencer said: “The scheme announced today provides Essential shareholders with an opportunity to realise an attractive cash amount of A$0.50 per Essential share, reflecting a compelling premium of ~46% over the current market value of Essential shares, based on the one-month VWAP.
“The scheme provides certainty for Essential shareholders in the context of an uncertain economic outlook.”
The proposed deal is subject to various conditions, including ESS shareholder and court approvals.
With the acquisition, TLEA expects to expand its lithium portfolio within Western Australia.
The acquisition also provides entry for TLEA into a highly prospective lithium province.
IGO acting CEO Matt Dusci said: “The ESS transaction provides an opportunity to accelerate lithium exploration to bring new resources to production.
“It also complements the significant growth opportunities within the TLEA business, which include the continued expansion of the Greenbushes operation, the successful ramp-up Train 1 of the lithium hydroxide facility at Kwinana, and progressing towards the financial investment decision for Train 2.
“We look forward to supporting TLEA with future work programmes over the ESS assets, as the joint venture seeks to bring new resources to production to address the market deficit of raw materials critical for clean energy transition.”