PERTH (miningweekly.com) – Lithium miner Galaxy Resources has joined the legal tussle to prevent embattled Alita Resources fulfilling a Deeds of Company Arrangement (DOCA) with US-based lithium products group Austroid Corporation.
The administrators of Alita and its subsidiaries have entered into a Doca with Austroid, which, if effectuated, would result in Austroid acquiring Alita and its assets, including the Bald Hill lithium mine, with no return for any of Alita’s shareholders, including Galaxy Resources.
Lithium WA Investments, which is associated with Alita’s previous mining contractor, is currently seeking court orders to either place Alita into liquidation, or to enable the company to acquire Alita’s assets for A$55-million.
Galaxy on Friday said that it had joined with Lithium WA in the legal proceedings, as a plaintiff, and would share the costs, along with fellow shareholder Tribeca Investment Partners.
The company told shareholders that the liquidation of Alita, or the sale of its assets to Lithium WA would provide a better outcome than the nil return of the Doca, if effectuated.
Galaxy has agreed to fund 60% of any consideration payable by Lithium WA under its offer for the Alita assets, in the form of a convertible loan which, at Galaxy’s election, would convert into a 60% interest of the issued capital of Lithium WA.
If Alita is placed into liquidation, Galaxy said that it would separately consider making an offer to acquire the company or its assets as any part of liquidator sale process.
Alita went into administration in 2019, and Bald Hill was placed on care and maintenance. The project was first commissioned in March 2018 and had an initial spodumene concentrate production capacity of 155 000 t/y.