Lithium Americas Corp. has announced plans to acquire Arena Minerals and its large-scale lithium project in the Pastos Grandes basin in Argentina. The two companies have entered into an agreement in which Lithium Americas will buy all the shares of Arena it doesn’t already own for around $227 million. Lithium Americas currently owns about 19.9% of Arena.
The purchase will allow Lithium Americas to integrate the development of its Pastos Grandes project with Arena’s Sal de la Puna project. Lithium Americas said this ”is expected to result in a larger scale and more optimized development plan and cost synergies for both projects.”
“This transaction will consolidate the highly prospective Pastos Grandes basin, and creates an exciting opportunity for Lithium Americas, a Canadian incorporated and headquartered company, to add incremental growth in one of the most important lithium producing regions in the world,” said Jonathan Evans, president and CEO of Lithium Americas. “The significant synergies between our two projects and a better understanding of the basin will enable us to advance development planning and maximize our growth pipeline in Argentina.
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“The timing of the transaction aligns with the Company’s previously announced plan to separate into two public companies in 2023, with significant project development activities expected at both businesses early next year.”
Lithium Americas Corp. announced Nov. 3 that it plans to separate into two companies, Lithium Americas (NewCo), which will own the Thacker Pass lithium project north of Winnemucca, and Lithium International, which will own Lithium Americas’ current Argentine lithium assets.
Lithium Americas’ purchase of Arena will result in Arena shareholders owning about 5.7% of Lithium Americas.
The deal must be approved by two-thirds of Arena’s shareholder and security holders in order to proceed. The transaction is expected to close by the third quarter of 2023.
“We are very excited to enter into this transaction with Lithium Americas,” said Will Randall, president and CEO of Arena. “The transaction allows Arena shareholders to realize a meaningful and immediate premium and represents a unique opportunity to participate in the development of a larger, consolidated project as we work with the Lithium Americas team to advance the Pastos Grandes basin.
“In addition, this transaction offers Arena shareholders exposure to the world-class, near-term producing CaucharĂ-Olaroz project and the Thacker Pass advanced development project.”
Lithium Americas expects CaucharĂ-Olaroz to begin lithium carbonate production in the first half of 2023.
The Bureau of Land Management issued a Record of Decision approving the Thacker Pass in January 2021. The Record of Decision has been appealed, and a ruling on the appeal is expected in early 2023.
Chinese company Ganfeng Lithium is a shareholder in both Lithium Americas and Arena Minerals. Lithium Americas has said Ganfeng is the company’s largest shareholder. Also, CaucharĂ-Olaroz is a joint venture between Lithium Americas and Ganfeng.
The Pastos Grandes project is 100% owned by Lithium Americas.
Ganfeng and its affiliates own up to 22% of Arena Minerals. Ganfeng has agreed to use commercially reasonable efforts to dispose of all its Arena securities prior to the closing of the transaction between Arena and Lithium Americas. If Ganfeng does not dispose of all its Arena securities, Lithium Americas will acquire them for cash, up to a maximum payment of $75 million, according to a statement on the transaction conditions.
