Western Lithium and Lithium Americas have agreed to combine their companies through an all-stock acquisition of Lithium Americas by Western Lithium. The transaction values Lithium Americas at about C$80 million and will create a company with a combined market capitalization of about C$150 million. The combined company will hold two leading lithium development projects: Western Lithium’s Kings Valley project in Nevada, United States, and Lithium Americas’ Cauchari-Olaroz project in Jujuy province, Argentina. “In addition to geographic diversification, having two development stage assets will enable post-merger Western Lithium to better manage development timelines to match production supply with growing market demand,” the Western Lithium announcement said.
Lithium Americas has completed an NI 43-101-compliant feasibility study of the Cauchari-Olaroz lithium project, which hosts approximately 2.7 million mt of lithium carbonate equivalent (LCE) and which contemplates initial commercial production at a rate of 20,000 mt/y of LCE. The project is permitted for construction and has a current development timeline of two years.
Western Lithium published an NI 43-101 compliant prefeasibility study for the development of Stage I of its Kings Valley project in May 2014. Stage I has proven and probable reserves of 570,000 mt of LCE at a lithium cut-off of 0.32%. The study contemplates starting production at a normalized rate of 13,000 mt/y of LCE, with an expansion to 26,000 mt/y in year four of operations and a project life of 20 years.
Western Lithium is continuing the permitting process for the project in conjunction with lithium demonstration plant trials. The current project development timeline stands at four years.
Western Lithium CEO Jay Chmelauskas will continue in that role in the combined company, which will retain the Western Lithium name. Lithium Americas executives Tom Hodgson, John Kanellitsas and Franco Mignacco will join the Western Lithium board of directors.
The companies expect the transaction to close in early September.