Lithium Power International Ltd (ASX:LPI) is set to complete the consolidation process of the 100%-owned flagship Maricunga lithium brine project within December.
LPI entered into definitive binding agreements to consolidate ownership of Maricunga in June 2022, via two all-scrip mergers with its joint venture partners Minera Salar Blanco SpA (MSB SpA and 33.31% interest) and Bearing Lithium Corp (TSX-V:BRZ). (Bearing and 17.14% interest).
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 taken place and the court has approved the scheme.
The Salar Blanco transaction is expected to take place in the week of December 19, satisfying the final condition to allow the Bearing Transaction.
Bearing transaction
The transaction with Bearing for its 17.14% interest will be finalised by way of a Canadian Plan of Arrangement, which has been approved by Bearing shareholders and the Canadian court.
The final condition to the Bearing transaction is the completion of the SBD transaction.
With court approval for the scheme for the SBD transaction, finalising the Bearing transaction will start.
The transaction is expected to complete by December 22, giving LPI 100% ownership of Maricunga.
“We are extremely pleased to be within reach of consolidating the ownership of Maricunga lithium brine project,” Lithium Power chairman David Hannon said.
“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 Maricunga
The Maricunga Project is 170 kilometres north-east of Copiapó in Salar de Maricunga in the Atacama Region of northern Chile.
In January 2022, LPI announced the results of its updated definitive feasibility study (DFS) for the stage one Maricunga Lithium Brine Project, which supports 15,200 tonnes per annum production of battery grade lithium carbonate for 20 years.
The DFS provides for a project NPV (leveraged basis) of US$1.4 billion (after tax) at an 8% discount rate, providing an IRR of 39.6%, a two-year payback and estimated steady-state annual EBITDA of US$324 million.
The study confirmed that Maricunga could be one of the world’s lowest-cost producers of lithium carbonate, with an operating cost of US$3,718 per tonne not including revenue credits from a potassium chloride by-product.
The project aims to achieve carbon neutrality once the operation beds down.