{"id":8993,"date":"2024-05-01T01:40:22","date_gmt":"2024-05-01T01:40:22","guid":{"rendered":"https:\/\/economicherald.net\/?p=8993"},"modified":"2024-05-01T01:40:22","modified_gmt":"2024-05-01T01:40:22","slug":"52pc-premium-lithium-energy-scores-top-marks-on-value-creation-with-sale-of-solaroz-for-97m","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=8993","title":{"rendered":"52pc premium: Lithium Energy scores top marks on value creation with sale of Solaroz for $97m"},"content":{"rendered":"<p>Deal reached to sell Solaroz lithium brine project for $97m<br \/>\nSale represents a 52% premium to Lithium Energy\u2019s one month VWAP<br \/>\nCompany to consider investment opportunities in the battery minerals area following sale of Solaroz and spin-off of Burke<\/p>\n<p>\u00a0<\/p>\n<p><strong><em>Special Report:<\/em> Lithium Energy\u2019s belief in the prospectivity of its Solaroz lithium brine project in Argentina has been validated with its sale to CNGR Advanced Material for $97m.<\/strong><\/p>\n<p>The sale price is equivalent to 86.5c per LEL shares, representing a 52% premium to the company\u2019s one month volume weighted average price, reflecting the value that it has created since the Company\u2019s IPO \u00a0in May 2021 at 20c per share.<\/p>\n<p>Solaroz is on the Olaroz salar in NW Argentina and hosts a resource of 3.3Mt LCE resource with a high-grade core of 1.3Mt of LCE\u00a0grading 400mg\/l lithium.<\/p>\n<p>This core underpins <a href=\"https:\/\/stockhead.com.au\/company\/lithium-energy-lel\/\"><strong>Lithium Energy\u2019s (ASX:LEL)<\/strong><\/a> scoping study for both 20ktpa and 40ktpa LCE production from Solaroz using conventional evaporation ponds processing.<\/p>\n<p>The same study also indicates that direct lithium extraction (DLE) techniques can potentially provide better recoveries and a more cost-effective operation \u2013 a theory that has received support from recent laboratory test work.<\/p>\n<p><a href=\"https:\/\/stockhead.com.au\/resources\/lithium-energy-recovers-92-of-the-lithium-from-solaroz-brine-in-argentina\/\"><strong>Laboratory work undertaken<\/strong><\/a> by Xi\u2019an Lanshen New Material Technology Co successfully achieved resin recovery of 92% lithium from Solaroz brine \u2013 a clear indicator that DLE is a viable alternative to evaporation ponds.<\/p>\n<p>Early in April 2024, LEL also reached an agreement with Novonix to <a href=\"https:\/\/stockhead.com.au\/resources\/lithium-energy-novonix-to-spin-off-queensland-graphite-assets-into-asx-listed-battery-anode-material-manufacturer\/\"><strong>spin out their Queensland graphite projects<\/strong><\/a> \u2013 Burke and Dromedary respectively \u2013 into an\u00a0ASX listed company, Axon Graphite that will look to become a vertically integrated mine to battery anode material manufacturing company.<\/p>\n<p>\u00a0<\/p>\n<h2><strong>Sale highlights value creation<\/strong><\/h2>\n<p>The sale of the company\u2019s 90% interest in Solaroz to CNGR Advanced Material \u2013 one of the world\u2019s largest producers of precursor materials for the battery materials supply chain \u2013 for $97m is a strong endorsement of Lithium Energy\u2019s management team to create significant value for shareholders in a challenging market conditions.<\/p>\n<p>The sale was made in what the Company believes to be in the best interests of shareholders given the significant decline in lithium prices over the last 12 months, the significant financial costs required to advance Solaroz into production relative to LEL\u2019s available capital, the company\u2019s ability to raise project finance, and the time required for its development.<\/p>\n<p>CNGR will pay a US$1.8m deposit with the remaining US$61.2m paid out under the following conditions:<\/p>\n<p>US$53.7m on completion which is expected in Q4 2024 and subject to shareholder and regulatory approval;<br \/>\nUS$3m in a joint escrow account for two years from completion as security for LEL\u2019s performance under the agreement; and<br \/>\nUS$4.5m deferred consideration payable by CNGR if the Benchmark Lithium Carbonate Price exceeds US$23,000\/tonne.<\/p>\n<p>\u201cThe proposed sale follows the conclusion of a formal process initiated by the company to seek a strategic partner for the development of Solaroz,\u201d executive chairman William Johnson said.<\/p>\n<p>\u201cAt the end of this process, taking account the multiple offers received and current market conditions, the board has determined that it is in the best interest of shareholders to consider the sale of the company\u2019s interest in the Solaroz Project to CNGR on the terms proposed.\u201d<\/p>\n<p>He noted that not only did the sale price reflect the significant value that LEL has created at Solaroz since the company was listed in May 2021, it will also remove the funding and development risks associated with the project.<\/p>\n<p>\u201cPost completion, the company will have the capital required to consider investment opportunities in the battery minerals area. The board will also give consideration to a potential distribution to shareholders,\u201d Johnson concluded.<\/p>\n<p>\u00a0<\/p>\n\n<p><span class=\"mce_SELRES_start\">\ufeff<\/span>\u00a0<\/p>\n<p><em>This article was developed in collaboration with Lithium Energy, a Stockhead advertiser at the time of publishing. <\/em><\/p>\n<p><em>\u00a0<\/em><\/p>\n<p><em>This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.<\/em><\/p>\n<p><span class=\"et_bloom_bottom_trigger\"><\/span><\/p>\n<p>The post <a href=\"https:\/\/stockhead.com.au\/resources\/52pc-premium-lithium-energy-scores-top-marks-on-value-creation-with-sale-of-solaroz-for-97m\/\">52pc premium: Lithium Energy scores top marks on value creation with sale of Solaroz for $97m<\/a> appeared first on <a href=\"https:\/\/stockhead.com.au\/\">Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"<p>Deal reached to sell Solaroz lithium brine project for $97m Sale represents a 52% premium to Lithium Energy\u2019s one month VWAP Company to consider investment <a href=\"https:\/\/economicherald.net\/?p=8993\" class=\"read-more-link\">[more&#8230;]<\/a><\/p>\n","protected":false},"author":0,"featured_media":8994,"comment_status":"","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-8993","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - 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