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Thursday, Jul 25, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Lithium

Edison Lithium inks letter of intent to acquire Argentina lithium producer

Resource Ventures’ assets will consist of 29 mining concessions over an area of 105,599 hectares in Catamarca Province

Edison Lithium inks letter of intent to acquire Argentina lithium producer
Salt flats in Catamarca, Argentina. Image via Edison Lithium.

Edison Lithium Corp. (TSXV: EDDY) (OTCQB: EDDYF) (FSE: VV0) inked a letter of intent (LOI) to buy Resource Ventures S.A, the Argentina lithium producing subsidiary of Meteor Energy, LLC for USD$5 million.

Edison announced the LOI on Monday. Before the sale, Resource Ventures will have first rolled out and retained the Pipanaco claims and one of the LEXI claims in a new subsidiary.

The parties agreed to make every effort to enter into a definitive agreement within two months with the end goal being closing the transaction in ways that work well with everyone.

“This transaction validates our purchase of the entire Resource Ventures property package two and half years ago for $1,250,000 and puts Edison into a strong cash position to assess other opportunities,” said Nathan Rotstein, Edison’s CEO.

Resource Ventures holds the rights to prospective lithium brine claims in the province of Catamarca, Argentina. These claims are primarily located in two geological basins known as the Antofalla Salar and the Pipanaco Salar.

ReVe’s assets will consist of 29 mining concessions over an area of 105,599 hectares in Catamarca Province, Argentina. The company will focus its efforts in Argentina on eight mining concessions over 28,766 hectares in the province.

The sale terms stipulate that Meteor will pay the company USD$25,000 upon the signing of the LOI.  Additional payments will follow of USD$475,000 and USD$4,500,000 to be paid by Meteor to the company upon the execution of a definitive agreement and the completion of the disposition, respectively.

Read more: Lithium South Development first production well installed at Hombre Muerto lithium project

Read more: Lithium South Development expands production goals, updates PEA on Hombre Muerto lithium project

Lithium industry in Argentina has been hot for acquisitions

Argentina has emerged as a significant player in the global lithium market.

The country boasts vast lithium reserves, primarily found in its salt flats or “salares.”  The most notable ones are located in the provinces of Catamarca, Salta and Jujuy. Argentina’s lithium production has grown substantially in recent years, driven by increasing demand for lithium-ion batteries used in electric vehicles and renewable energy storage.

According to the International Energy Agency, Latin America provides 35 per cent of the world’s lithium supply.  Chile and Argentina take the lead with 26 per cent and 6 per cent, respectively.

The Argentine lithium industry thrives on domestic and foreign investment, with many major mining companies actively operating in the region.

A few of the most well-known names include the United States-based Albemarle Corporation (NYSE: ALB), and both Livent Corporation (NYSE: LTHM) and Allkem Limited (ASX: AKE). The latter two of which will be merging in the new year to form Arcadium Lithium.

All of the former companies are in the multiple billion dollar range and that’s not a coincidence. Larger companies have been scaling their operations either through diversification or acquisition of a smaller lithium producer.

In 2023, for example, Chinese-based Zijin Mining Group Co. (SHA: 601899) acquired Neo Lithium Corp and its Argentina lithium project for USD$705 million. Following suit, Rio Tinto Group (ASX: RIO) (NYSE: RIO) (LON: RIO) purchased the Rincon lithium project for USD$825 million.

That leaves Lithium South Development Corporation (TSXV: LIS) (OTCQB: LISMF) (Frankfurt: OGPQ) which operates out of the Salar del Hombre Muerto salt flat, which recently installed its first production well.

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Lithium South Development Corporation is a sponsor of Mugglehead news coverage

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