Lithium Explorer Essential Metals was recently purchased for $136 million by the IGO Group and Tianqi.
Both companies have been in partnership since late 2020 in an effort to further their lithium procurement. Their latest acquisition will allow a foothold in the WA lithium production zone between Kalgoorlie and Norseman.
Both IGO Group and Tianqi have signed a binding scheme implementation agreement (SIA) with Essential Metals to enact a scheme of arrangement. This arrangement is under their Tianqi Lithium Energy Australia (TLEA) umbrella.
The consideration for the scheme is $0.50 per share, equating to a $136 million equity value for Essential Metals.
Essential Metals has been drilling Pioneer Dome. Pioneer Dome is an early-stage deposit located about 600km from Greenbushes. Greenbushes is Australia’s biggest lithium mine in which IGO and Tianqi have a 51 per cent stake. The Greenbushes mine has been in operation since 1983 and has significant reserves of lithium-bearing spodumene. It also has a processing plant that produces lithium hydroxide and lithium carbonate which are used in lithium-ion batteries.
“We believe this transaction is a great outcome for Essential shareholders and for other stakeholders, including employees, suppliers, the Ngadju people and the state of Western Australia, all of whom will benefit from the Pioneer Dome lithium project being developed by a large, well-financed and experienced lithium sector participant as is TLEA,” Essential managing director Tim Spencer said.
IGO acting chief executive officer Matt Dusci provided some insight into the proposal.
“Both IGO and TLC are committed to progressing and growing our lithium joint venture business,” he said.
“The ESS transaction provides an opportunity to accelerate lithium exploration to bring new resources to production.”