PERTH (miningweekly.com) – The Australian share price of Hawkstone Mining dropped by more than 22% on Friday after the company announced its withdrawal from its acquisition of USA Lithium.
Hawkstone in March this year took an option over USA Lithium, which holds the Big Sandy and Lordsburg lithium projects, in Arizona and Mexico respectively.
Hawkstone paid a A$250 000 non-refundable payment for the option right, satisfied through the issue of 12.5-million ordinary shares, and on exercising the option, the company was also to issue A$5-million worth of fully paid ordinary shares, equating to a further 250-million shares. Furthermore, Hawkstone was expected to reimburse A$100 000 of expenditure already incurred by USA Lithium on the project areas.
Hawkstone in June announced that it was in discussions with USA Lithium to amend the acquisition agreement, with the intention to de-risk the transaction. However, the company said on Friday that the parties were unable to reach an agreement, and the mutual decision was taken to terminate the acquisition agreements.
The ASX-listed company told shareholders that it would retain its interest in the Kangwane South anthracite project, in South Africa, and would continue to pursue a strategy to identify opportunities to create shareholder value.
Hawkstone’s share price fell from a high of 1.9c a share on Friday, to close on 1.6c a share.