Why is Lithium Australia selling its interest in the Lake Johnston Lithium Project?
Lithium Australia Signs Binding Agreement for A$2. 0m Sale of the Lake Johnston Lithium Project
Charger Metals NL acquires Lithium Australia's remaining interest in the Lake Johnston Lithium Project, strengthening both companies' positions in the lithium market
Perth, Western Australia - In a significant move that solidifies its strategic focus, Lithium Australia Ltd. (ASX:LIT) has officially signed a binding agreement with Charger Metals NL (ASX:CHR) for the sale of its remaining 30% interest in the Lake Johnston Lithium Project. This exciting development not only boosts Charger Metals' presence in the lithium market but also enhances Lithium Australia's financial position.
Sale Highlights
Under the agreement, Charger Metals will acquire:
Lithium Australia's remaining 30% interest in the Lake Johnston Lithium Project tenements.
The Company's remaining 30% interest in the contractual rights to the lithium in the Lake Johnston Lithium Project.
In exchange for these assets, Charger Metals will provide Lithium Australia with a substantial cash consideration of A$2.
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0m. The payment structure includes a non-refundable exclusivity payment of A$0. 15m within two business days of signing the Acquisition Agreement, with the remaining A$1. 85m to be paid upon completion.
Confidence in Future Production
While relinquishing its interest in the Lake Johnston Lithium Project, Lithium Australia retains a valuable right-of-refusal for up to 30% of the lithium produced by the project. This agreement ensures that Lithium Australia can secure the necessary supply for its future commercial production of lithium ferro phosphate (LFP) while supporting Charger Metals' ambitious growth plans.
Shareholder Approval Process
To finalize the acquisition, Charger Metals is required to seek approval from its shareholders at an upcoming general meeting. This necessary step underscores the transparency and accountability of the transaction, ensuring the interests of all parties are adequately represented.
Strategic Asset Rebalancing
Lithium Australia's decision to divest its remaining interest in the Lake Johnston Lithium Project signifies its commitment to streamlining its operations and focusing on core assets. By strategically reallocating resources and strengthening its balance sheet, the company demonstrates its dedication to driving long-term value for shareholders.
Solidifying Partnerships
While selling its interest in the Lake Johnston Lithium Project, Lithium Australia remains invested in Charger Metals. The company retains a holding of 9. 6m ordinary shares, a testament to its confidence in Charger Metals' potential and the strategic alignment between the two organizations.
As the transaction progresses, both Lithium Australia and Charger Metals are poised for success in the dynamic and fast-growing lithium market. The sale of the Lake Johnston Lithium Project solidifies Charger Metals' position while providing Lithium Australia with the necessary resources to fuel its future ventures.
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