American Lithium Corp. [LI-TSXV; LIACF-OTCQB; 5LA1-FSE] has struck a deal to acquire Plateau Energy Metals Inc. [PLU-TSXV; PLUUF-OTCQB] in a move that it said will consolidate two significant and strategic undeveloped lithium assets in the Americas.
The agreement aims to combine American Lithium’s TLC lithium project in Nevada with Plateau’s Falchani lithium project in Peru at a time of rapidly growing lithium demand in the context of an increasing focus on electric vehicles, energy storage and renewable energy generation.
The transaction also offers American Lithium shareholders exposure to Plateau’s Macusani project, which is believed to be the largest uranium deposit in Peru.
Under the terms of the agreement, American Lithium has pledged to acquire all the issued and outstanding common shares of Plateau on the basis of 0.29 units (exchange units) of American Lithium for each share of Plateau by way of a plan of arrangement.
Each exchange unit will consist of one common share of American Lithium plus one half (0.5) of a common shares purchase warrant. Each whole warrant will entitle the holder to acquire one additional share of American Lithium at an exercise price of $3.00 for a period of 36 months from the transaction completion date.
The arrangement represents a 72% premium to Plateau shareholders using a trailing 20-day volume weighted average trading price on the TSX Venture Exchange of each company as of the market close on February 5, 2021, and values the exchange warrants using the Black-Scholes methodology at a 50% volatility.
Plateau Energy shares advanced on the news, rising 55% or 33 cents to 93 cents on volume of over 3.97 million. The shares previously traded in 52-week range of 68 cents and 16 cents.
American Lithium shares jumped 19.5% or 64 cents to $3.92 on volume of over 3.3 million. The shares were previously trading in a 52-week range of $3.38 and 13.5 cents.
Amerian Lithium is currently exploring and developing the TLC lithium project in the Esmeralda lithiuim district in Nevada and 3.5 hours south of the Tesla Motors Ltd. [TSLA-NASDAQ] Gigafactory. TLC is located in the same basinal environment as Albemarle Corp.’s [ALB-NYSE] Silver Peak lithium mine as well as several advancing deposits, including’s [CYP-TSXV] Clayton Valley Project.
Plateau Energy has been working to position itself to be a big player in both the lithium and uranium sectors.