On October 9th, Zijin Mining and Canadian Neo Lithium Company (TSXV: NLC) announced that they have entered into a definitive agreement to acquire all outstanding shares of Neo Lithium in cash at a price of C $6.50 per share for a total consideration of approximately C $960 million (RMB 4.96 billion).
The transaction represents a premium of approximately 36% to the Neo Lithium 20-day average price. The arrangement agreement includes customary unsolicited provisions for Neo Lithium, including trust provisions, and Zijin's right to match any competing offer that constitutes a superior offer. Under certain circumstances, both parties are entitled to a termination fee of $35 million.
Ontario, the transaction will be subject to the commercial company law under the arrangement of the plan is completed, must be approved by at least 66% of voting shareholders, also need to get some governments, regulators and the approval of the courts and the securities and exchange, including the Chinese authorities approval and the approval of the investment Canada act, as well as other customary closing conditions in this nature of trading. The shareholder meeting is expected to take place in December 2021 and the deal is expected to close in the first half of 2022.
Waldo A. Perez, President and CEO of Neo Lithium said:
"After a thorough strategic process, we are very pleased that a leading global mining company has made this all-cash premium offer to our shareholders. It was the result of a collective effort by our premier lithium lake exploration team, starting with the initial discovery in late 2015, to identify one of the largest and highest grade lithium lake deposits in the world, culminating in this premium acquisition in just six years. We believe it is time for our project to enter the construction and production phase together with Zijin. Zijin is a leader with a track record of developing projects in a responsible manner that respects the interests of local employees, communities and authorities."
Chen Jinghe, Chairman of Zijin Mining said:
"Neo Lithium's 3Q Lithium salt lake project in Catamarca, Argentina is one of the largest and highest-grade projects of its kind in the world. We have great respect for the management and professional team that discovered and successfully explored the project. The 3Q project is an important addition to Zijin's growing global portfolio and is a good choice for zijin to enter the new energy mineral sector. Thanks to the efforts and investment of the professional team in the initial stage of the project, coupled with zijin's strong capital and mining technology, we are confident to develop this excellent project into the world's leading lithium carbonate project. In line with Zijin's desire to develop together, we will continue to work closely with the local community and government authorities so that all relevant stakeholders can benefit from the successful development of the project."
The 3Q project is located in the Latin American Lithium Triangle, in Catamarca province, Argentina's largest lithium producing region, covering an area of approximately 35,000 hectares, including approximately 16,000 hectares of salt lakes. Zijin said it would retain LIEX S.A., the local operating subsidiary of Neo Lithium. Existing management and professional team, and contribute to the economic and social development of Catamarca province in the process of advancing 3Q project development.
