Canadian mining company Lithium Americas has entered into a definitive agreement to acquire the remaining shares of Arena Minerals, by way of a plan of arrangement.
Under the terms of the agreement, Arena shareholders would receive 0.0226 of a Lithium Americas common share, for each Arena Share held.
The transaction consideration indicates a total equity value of $227m for Arena Minerals, based on its closing price on 19 December 2022.
It is around 28% premium to Arena’s closing price, and around 27% premium to its 20-day volume weighted average price for the period ending 19 December 2022.
The acquisition is expected to be completed in the third quarter of 2023, subject to receipt of regulatory approval.
Upon closing of the transaction, Arena shareholders are expected to own around 5.7% stake in Lithium Americas.
Lithium Americas president and CEO Jonathan Evans said: “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.
“The significant synergies between our two projects and a better understanding of the basin will enable us to advance development planning and maximise our growth pipeline in Argentina.
“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.”
The current acquisition agreement builds on an existing technical collaboration between Lithium Americas and Arena, which was initiated in April this year.
Lithium Americas said that the acquisition will add a complementary resource that significantly expands its growth in Argentina, without affecting existing operations.
It allows Arena shareholders to benefit from the future upside potential of its diversified portfolio assets in the US and Argentina.
They can also benefit from the development of the Sal de la Puna project, which is being developed alongside Lithium Americas’ Pastos Grandes project.
Lithium Americas expects the deal to combine the Pastos Grandes project and the Sal de la Puna project in the Pastos Grandes basin.
Arena president and CEO Will Randall said: “The transaction allows Arena shareholders to realise 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 Caucharí-Olaroz project and the Thacker Pass advanced development project.”
