Lithium Power International is set to consolidate 100% ownership of the Maricunga Lithium Brine project in Chile through a three-party all-scrip merger with Minera Salar Blanco SpA and Bearing Lithium Corp.
Lithium Power International (LPI) has revealed it is entering into definitive binding agreements to consolidate full ownership of the Maricunga Lithium Brine project (Maricunga) in Chile through two scrip mergers with its joint venture (JV) partners Minera Salar Blanco SpA (MSB SpA) and Bearing Lithium Corp (Bearing).
Consolidating 100% ownership
Currently, LPI owns a 51.55% share in Maricunga, while MSB SpA holds 31.31% and Bearing holds 17.14%. The consolidation of ownership will be conducted through two separate transactions. MSB SpA will contribute its 31.31% interest in Maricunga to Delaware company, Salar Blanco, LLC (SBD), which will be a wholly owned subsidiary of MSB SpA. LPI will consolidate ownership of SBD’s interest in Maricunga through a Delaware merger with SBD. Meanwhile, the transaction with Bearing for its 17.14% interest will be finalised through a Canadian Plan of Arrangement.
LPI’s Chairman, David Hannon, explained: “We are extremely pleased to have reached an agreement with both MSB SpA and Bearing to consolidate 100% ownership of Maricunga. The updated DFS released on 20 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.
“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 SpA and the new Bearing shareholders.”
Martin Borda, Director of Lithium Power, said: “I am excited to consolidate ownership of Maricunga in a logical transaction that places the company ideally to pursue the development of the Project and greatly enhances LPI’s ability to deliver the full value of the Maricunga project to LPI’s shareholders.”
Gil Playford, Chairman and CEO of Bearing added: “The Bearing Board of Directors are in unanimous agreement with our MSB Joint Venture Partners, LPI and Mr Martin Borda, the owner of MSB SpA, to consolidate our ownership in MSB for an equity interest in ASX listed LPI, which will hold 100% of the Project.
“The Officers and Directors have agreed to vote in favour of their stock and recommend to the Bearing Shareholders to vote in favour of the transaction at the annual and special shareholders meeting to be held in early September. The Board firmly believes the Bearing shareholders will benefit from the numerous advantages of consolidating 100% of the project into LPI as well as substantially improved liquidity of LPI.”
The Maricunga Lithium Brine Project
Maricunga is situated 170km northeast of Copiapó in Salar de Maricunga in the Atacama Region of northern Chile. In January 2022, the company revealed the results of its updated definitive feasibility study (DFS) for the Stage One Maricunga Lithium Brine Project, which supports 15,200 t/a production of battery-grade lithium carbonate for 20 years. The DFS provides for a project NPV of $1.4bn (after tax) at an 8% discount rate, providing an IRR of 39.6%, a two-year payback and anticipated steady-state annual EBITDA of $324m.
As well as this, the study validated Maricunga’s potential as one of the world’s lowest-cost producers of lithium carbonate with an OPEX of $3,718 per tonne, not including credit from potassium chloride by-products. The project will have an outstanding ESG profile, intending to attain carbon neutrality once the operation settles down, establishing new standards for social relationships.
For more information about LPI’s consolidation of the Maricunga Lithium Brine Project, please visit the announcements on its website.