Lithium X Energy Corp. [LIX-TSXV, LIXXF-OTC] on Thursday March 8 released an update on the expected completion of a previously announced plan of arrangement with Chinese investment firm Nextview New Energy Lion Hong Kong Ltd.
On December 18, 2017, it was revealed that Nextview is moving to acquire the raw material needed to produce batteries for electric vehicles by scooping up Lithium X Energy in an all-cash deal worth $265 million or $2.61 a share.
The deal underscores the high degree of investor interest in lithium, which is being driven by the commodity’s key role as an ingredient in the production of lithium ion batteries for energy storage and the electric vehicle sector.
Nextview recently acquired a 20% stake in Bacanora Minerals Ltd. [BCN-TSXV, AIM] via a $53.5 million private placement deal. In return, Bacanora has agreed to supply the Chinese firm with up to 7,000 tonnes annually of lithium carbonate from its Sonora Project in Mexico.
Lithium X is an exploration and development company with two projects in Argentina’s Lithium Triangle. It is also a player in Nevada’s Clayton Valley, via its 19% interest in Pure Energy Minerals Ltd. [PE-TSXV; HMGLF-OTC; AHG1-FSE].
NextView is an active investment firm with offices in Beijing and Shanghai. It manages over RMB30 billion in assets and invests in new energy, resources, transport, sports and consumer products.
Under an agreement that was announced in December 2017, Nextview will acquire the common shares of Lithium X for $2.61 a share. It will also acquire all of the company’s outstanding warrants, paying $0.01 for each warrant. This amounts to a 29.4% premium on the 20-day volume weighted average trading price of Lithium X shares during the period ended December 15, 2017. It also marks a 22.5% premium on the closing price of Lithium X shares on the TSX Venture Exchange on the same date.
Lithium X’s flagship project is the Sal de Los Angeles lithium brine project in Argentina. It hosts a NI 43-101-compliant indicated resource of 1.037 million tonnes of lithium carbonate equivalent. On top of that is an inferred resource of 1.007 million tonnes of lithium carbonate equivalent.
It has a second lithium brine project in Argentina, known as the Arizaro property. It consists of 33,846 hectares and covers part of the western and eastern portions of the Salar de Azario, one of the largest known salt lakes in the world.
In Nevada, the company has consolidated its holdings with those of Pure Energy, which is developing a lithium project in the Clayton Valley. According to a preliminary economic assessment, the project could generate average annual production of approximately 10,300 tonnes of lithium hydroxide or 9,100 tonnes of lithium carbonate equivalent.
On Thursday, Lithium X said it has been advised by Nextview that the Chinese firm has completed its financial arrangements and has wired the funds required to complete the arrangement to the depository.
As a result, closing of the arrangement is expected to occur on March 9, 2018.