PERTH (miningweekly.com) – ASX-listed Lithium Power International (LPI) on Wednesday announced plans to demerge its Western Australian hard rock lithium assets.
The demerger will create a dedicated, Western Australia-focused lithium exploration company with the management team and resources to realise the value of the Western Australian assets, which include a number of exploration permits.
LPI told shareholders that the demerger would enable the company to focus its resources on developing its Maricunga lithium brine project in Chile.
“LPI believes that there is a compelling strategic rationale for the demerger of LPI’s Western Australian hard rock lithium exploration assets,” said CEO Cristobal Garcia-Huidobro.
“The demerger will offer existing LPI shareholders the opportunity to create long-term value via a new, ASX-listed company.”
Garcia-Huidobro noted that the company had a number of highly prospective assets located in Western Australia that were at an exciting stage of exploration. They comprise three tenements in the Greenbushes region, immediately along strike from the Talison mine, and three tenements in the Pilbara region.
“These assets deserve their own time, attention and resources, and LPI’s board believes that it is the best outcome for LPI shareholders to create a dedicated, Western Australia-focused company that has the technical, human and financial resources to advance these exciting assets. A capital reduction and in-specie distribution to LPI shareholders will provide a direct level of participation in the Western Australian assets. It will also allow LPI to focus solely on the development of its flagship Maricunga lithium brine project in Chile, which is at a much more advanced stage of development.
“We are excited by what DemergeCo can achieve and look forward to providing further details on the demerger in the coming weeks and months."
The demerger is intended to be undertaken via a capital reduction to effect an in-specie distribution of DemergeCo shares to LPI shareholders, pro rata to their shareholding in LPI. The demerged entity will apply for admission to the official list of ASX, and for quotation of its shares on ASX, in conjunction with the demerger.
LPI expects the demerger process to be completed in the first half of 2022, conditional on all necessary approvals having been obtained, and subject to, among other things, LPI shareholder approval.