Lithium Power International (LPI) has announced a development in consolidating 100% ownership of the company’s flagship Maricunga lithium brine project.
LPI announced on 22 June this year that the company had entered into definitive binding agreements to consolidate ownership of the Maricunga lithium brine project through two all-scrip mergers with its joint venture partners Minera Salar Blanco SpA (33.31% interest) and Bearing Lithium Corp. (17.14% interest).
Minera Salar Blanco SpA (MSB SpA) has now contributed its 31.31% interest in Maricunga to Delaware company, Salar Blanco, LLC (SBD), a wholly-owned subsidiary of MSB SpA. The second court hearing for the scheme with SBD has now been conducted and approved by the court. LPI is working on completing the merger with SBD to consolidate MSB SpA’s 31.31% interest in Maricunga.
The transaction with Bearing for its 17.14% interest will be completed via a Canadian Plan of Arrangement approved by Bearing Shareholders and the Canadian court. The final condition of the Bearing transaction is the completion of the SBD transaction. Now the SBD transaction has been approved in court, the process for the Bearing transaction will commence and is expected to be completed by 22 December. This will result in LPI taking ownership of 100% of Maricunga.
David Hannon, the Chairman of LPI, commented: “We are extremely pleased to be within reach of consolidating the ownership of the Maricunga lithium brine project. This was a very logical and advantageous transaction for LPI shareholders. Assuming full control of the project creates a strong platform for LPI to fund and develop the project and will deliver accretive value to shareholders. We welcome Mr Borda and the Bearing shareholders to the LPI register and look forward to their direct involvement.”
About the Maricunga project
The Maricunga Project is situated 170km northeast of Copiapó in Salar de Maricunga in the Atacama Region of northern Chile. It has the potential to support 15,200 t/a production of battery-grade lithium carbonate for 20 years. Results from LPI’s Definitive Feasibility Study (DFS) for the Stage One Maricunga lithium brine project were released in January of this year, revealing a project NPV of US$1.4bn after tax at an 8% discount rate, providing an IRR of 39.6%, a 2-year payback and estimated steady-state annual EBITDA of $324m.
The study illuminated that the Maricunga lithium brine project could be one of the lowest-cost producers of lithium carbonate globally, with an operating cost of $3,718 per tonne, not including revenue credits from a potassium chloride by-product. The project will also boast an excellent ESG profile, aiming to be carbon neutral once the operation beds down.
