Southern Gold Ltd (ASX:SAU) plans to snap up battery technology company Iondrive Technologies Pty Ltd (IDT) for $1.2 million in SAU shares, subject to shareholder approval.
The move signifies Southern Gold's commitment to expanding its business while maintaining its core focus on exploration in South Korea.
This strategic acquisition is an investment that would diversify Southern Gold's business and capitalise on the rapidly expanding global energy storage market.
To this end, the company plans to raise $2.5 million through a placement. The boost in funds will propel IDT's operations and further exploration activities in South Korea.
Rights to intellectual property
IDT holds a strategic partnership agreement with the University of Adelaide, allowing the company exclusive rights to license or purchase the intellectual property of three commercialisation-ready battery technologies developed by the university.
University of Adelaide chief innovation and commercialisation officer Dr Stephen Rodda said: “This transaction is a testament to the calibre of research being undertaken by our world-class researchers at the University of Adelaide, in the field of energy storage and battery technology.
“Our researchers now have a platform to access a pool of like-minded investors and the corporate skillset to accelerate the translation of our research to industry.
“This is another wonderful example of the University of Adelaide partnering with industry to support the transfer and development of new technologies.”
Non-flammable lithium-ion batteries
These technologies include non-flammable lithium-ion batteries, a lithium battery recycling solvent and high-performing aqueous batteries.
Over the next 12 months, IDT will work on translating these cutting-edge technologies into commercial applications, including collaboration with potential international industry partners for piloting these technologies.
The acquisition aligns with Southern Gold's recent move into lithium and rare earth element exploration in South Korea, allowing the company to participate in downstream processing and future applications for lithium.
To support IDT's operations and fund ongoing exploration activities, Southern Gold plans to raise $2.5 million through a placement, with $1.2 million allocated for IDT's commercialisation activities. The remaining funds will be used for continued exploration in South Korea.
“This acquisition is an exciting strategic investment for Southern Gold, with the global push to net zero emissions by 2050 driving significant demand for both electric vehicles and grid energy storage,” said managing director Robert Smillie.
“IDT is well positioned to participate in this growing industry with access to technologies across three key areas and a collaboration agreement that leverages the University of Adelaide’s considerable investment in the School of Chemical Engineering and Advanced Materials.”
“While exploration in South Korea will continue to be our core business, we see this as an opportunity with the potential to add shareholder value and diversify Southern Gold’s business.”