Western Lithium Announces Merger

RNS Number : 7679R

Rare Earth Minerals PLC

01 July 2015

 

1 July 2015

Rare Earth Minerals Plc.

("Rare Earth Minerals", "REM" or "the Company")

Western Lithium Announces Merger with Lithium Americas

Rare Earth Mineral Plc (AIM: REM) is pleased to announce that Western Lithium USA Corporation ("Western Lithium"), in which REM holds an approximate 3.05% interest, has announced a merger with Lithium Americas Corp. ("Lithium Americas"), consolidating strategic lithium deposits in North and South America.

The transaction is structured as a statutory plan of arrangement under which Western Lithium will acquire all of the outstanding shares of Lithium Americas in an all-stock transaction that values Lithium Americas at approximately C$80 million ("Arrangement Agreement").

Highlights from the joint release are set out below:

·    The combined entity will control two large and geographically diversified development stage lithium projects which allows for an orderly development timeline that commences with Hectatone TM business revenues in 2015, followed by potential revenues from Cauchari-Olaroz under a contemplated two year development timeline, and potential revenues from Kings Valley under a contemplated four year development timeline.

·    Lithium Americas has completed a NI 43-101 compliant feasibility study on its Cauchari-Olaroz lithium project in Jujuy, Argentina:

o  The project hosts approximately 2.7 million tonnes of lithium carbonate equivalent (LCE) at a lithium cut-off grade of 354 milligrams per litre.

o  Initial commercial production at a rate of 20,000 tonnes per year of LCE.

o  The project is also permitted for construction.

·    Western Lithium published a NI 43-101 compliant pre-feasibility study for the development of its Stage I lithium deposit in Nevada,USA:

o  it contains proven and probable reserve of 570,000 tonnes of LCE at a lithium cut-off of 0.32%.

o  The study contemplates starting production at normalised yearly rate of 13,000 tonnes of LCE, with an expansion to 26,000 tonnes in year four, and a project life of 20 years.

Pursuant to the Arrangement Agreement, all of the Lithium Americas issued and outstanding common shares will be exchanged on the basis of one share of Lithium Americas for 0.789 of a common share of Western Lithium (the "Exchange Ratio"). Western Lithium will also settle all of Lithium America's in-the-money options and warrants, as well as certain change of control payments otherwise payable in cash, using the same Exchange Ratio calculation. Upon completion of the transaction, existing Western Lithium shareholders and Lithium Americas' security holders will own approximately 50.05% and 49.95% of the combined company, respectively. The transaction is subject to shareholder approval from both Western Lithium and Lithium Americas.

Based on the closing price of Western Lithium's common shares on the Toronto Stock Exchange (the "TSX") of C$0.64 on June 29, 2015, the offer implies consideration of C$0.50 per Lithium Americas common share which represents a premium of 36% to the closing price of Lithium Americas common shares of C$0.37 on the TSX on June 29, 2015 and a premium of 58% based on the volume weighted average prices of each respective company on the TSX for the 20-day period ending on June 29, 2015.

Western Lithium's full news release can be found at: http://web.tmxmoney.com/article.php?newsid=76457255&qm_symbol=WLC

Kiran Morzaria, the Company's Chief Executive Officer commented:

"The Lithium market is approaching an important inflection point important inflection point for the sector, with the strong fundamentals are driving a rapidly increasing demand, with little additional supply capacity from the traditional producers.

This merger along with Albermale's acquisition of Rockwood Holdings earlier this year for US$ 6.2 billion is part of a trend to find synergies in technology, management and assets that will allow the economic development of lithium assets and fill the anticipated supply gap."

- Ends -

For further information please contact: 

Rare Earth Minerals plc                                                                                     [phone]

David Lenigas

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)                                                          [phone]

James Joyce

Mark Leonard

Square1 Consulting                                                                                            [phone]

David Bick, Mark Longson                                                                     

 

END

 

 

MSCUROURVWANOUR