Albemarle takes $109 million stake in Patriot Battery

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Albemarle Corp. [ALB-NYSE], the U.S. specialty chemicals giant, is making a $109 million strategic investment in Patriot Battery Metals Inc. [PMET-TSXV, PMETF-OTCQB, R9GA-FSE].

Under an agreement, Albemarle will subscribe for 7.12 million common shares of Patriot Battery Metals at $15.29 a share, a move that will leave the U.S. company with a 4.9% stake in Patriot Battery on fully diluted basis. Proceeds will be used to accelerate the development of Patriot Battery’s Corvette lithium project in Quebec, through drilling, permitting, study work and more, the Canadian company’s President and CEO Blair Way said in a press release.

“I believe both Patriot and Albemarle can be a big part of building out the required front-end to the lithium chemicals supply chain in North America and Europe over the coming years,’’ he said.

At the closing of the strategic investment (likely on or before August 4, 2023), Patriot said it will enter into a non-binding memorandum of understanding (MOU) with Albemarle to assess partnership opportunities to study the viability of a downstream lithium hydroxide plant integrated with the Corvette property and located in Canada or the U.S., including options in Quebec.

The MOU includes an exclusivity period for an initial nine months, which may be extended. Patriot cautions that there is no assurance that the MOU will result in the completion of a study or the formation of a partnership or joint venture with Albemarle.

Also at closing, Patriot and Albemarle will enter into an investor rights agreement for a 12-month term. Under the agreement, Albemarle will have the right to receive notices regarding participation in future equity capital raises in order to maintain its ownership level.  The investor rights deal will also include a standstill agreement in which Albemarle pledge’s not to increase its stake in Patriot above 4.9%.

Details of the agreement were announced after the close of trading on July 31, 2023, when Patriot Battery shares closed at $14.30. The shares are currently trading in a 52-week range of $17.74 and $3.05.

“We look forward to collaborating with Patriot to better understand the Corvette property and the opportunities this project represents for the North American battery materials supply chain,’’ said Alexander Thompson, vice-president, lithium resources, Albemarle.

Patriot Battery is currently advancing its CV5 Pegmatite towards the pre-feasibility study stage. CV5 is part of the company’s wholly-owned Corvette – FCI gold-copper-silver-lithium project in the James Bay Region of Quebec.

The CV5 spodumene pegmatite hosts an estimated inferred resource of 109.2 million tonnes at 1.42% Li20 and 160 PPM Ta205, making the largest lithium pegmatite resource in the Americas.

Patriot Battery Metals has been targeting the CV Lithium Trend, an emerging spodumene pegmatite district discovered by the company in 2017. It spans more than 25 kilometres across the Corvette Property, covering the FCE West, FCE East and Corvette claim blocks. It consists of numerous spodumene pegmatite occurrences, which include the CV1, CV2, CV3, CV5, CV6, and CV7 pegmatites, highlighted by the CV5 and CV1 Pegmatite.

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