PERTH (miningweekly.com) – Lithium developer Lithium Power International (LPI) has unveiled plans to consolidate ownership of the Maricunga brine project, in Chile, by way of a three-party all-scrip merger with its joint venture (JV) partners.
LPI currently holds a 51.55% interest in the Maricunga project, with JV partner Minera Salar Blanco SpA (MSB) and TSX-V-listed Bearing Lithium Corp, holding a 31.31% and 17.14% respective interest.
MSB will contribute its 31.31% interest in Maricunga to Delaware company Salar Blanco (SBD), with LPI to issue more than 161.55-million of its own shares to acquire and merge with SBD.
In the transaction with Bearing, the merger will be completed by way of a Canadian plan of arrangement, with LPI to issue 0.70 of its own shares for every Bearing common share issued, for a total of 76.34-million LPI shares. For every Bearing option and Bearing warrant exercised prior to the completion of the transaction, LPI will issue up to a maximum of 18.2-million shares, assuming all options and warrants are exercised.
“We are extremely pleased to have reached an agreement with both MSB and Bearing to consolidate 100% ownership of Maricunga. The updated definitive feasibility study (DFS) released in January 2022 demonstrates that Maricunga could be one of the lowest-cost producers of lithium carbonate in the world, with the project’s strong economics underpinning a highly attractive asset,” said Lithium Power chairperson David Hannon.
“This transaction is a highly logical step for LPI. By assuming full control of the project, LPI will create a strong platform from which to develop and fund Maricunga. We look forward to continuing to deliver long-term value for all LPI shareholders, including MSB and the new Bearing shareholders.”
The SBD transaction is subject to shareholder and regulatory approvals, while the Bearing transaction is also subject to approval from Bearing’s security holders, the Canadian courts, and the completion of the SBD transaction.
The January DFS estimated that the project would require an initial $419-million capital investment into the Stage 1 project, which will support the production of 15 200 t/y of lithium carbonates over a mine life of 20 years.
The study estimated that the project would have a net present value of $1.42-billion and an internal rate of return of 39.6%, with a two-year payback period. Project operating cost places Maricunga among the most efficient producers with an operating expenditure of $3 718/t, not including credit from potassium chloride by-product.