The market dynamics for lithium are positive. Lithium demand has grown consistently over the past decade and is expected to accelerate significantly in the near term from increased consumption of lithium batteries, which are a critical component of hybrid and electric vehicles.
The board of directors of both Talison and Salares unanimously support the proposed transaction. Salares management and directors (together representing 7.43% of Salares shares on a fully diluted basis) have agreed to enter into lock-up agreements to support the transaction.
Merger Proposal
Under the terms of the proposed transaction, which is to be structured as a plan of arrangement (“Plan of Arrangement”) under the British Columbia Business Corporations Act, it is anticipated that common shares of Salares will be exchanged for ordinary shares of Talison1 on the basis of 2.81 Salares shares for one Talison share. All outstanding options and warrants of Salares will be assumed by Talison, and exercisable in accordance with their terms for Talison shares.
Upon completion of the Plan of Arrangement, existing Salares and Talison shareholders will own 20% and 80%, respectively, of the combined company (on a fully diluted basis), prior to the conversion of the Subscription Receipts issued under the CAD$40 million Private Placement (as described below).
Vancouver’s Salares Lithium merging with Australian firm for world’s first pure-stock metal play
Talison Minerals and B.C. company hold properties in South America
VANCOUVER, July 15, 2010 — Salares Lithium Inc. (TSXV: LIT) (“Salares”) and Talison Minerals Pty Ltd (“Talison”) are pleased to announce that they have executed a binding letter agreement (“Letter Agreement”) to combine their respective lithium assets and create the world’s largest, publicly traded lithium production and exploration company.
The merger will combine Talison’s world class lithium minerals production in Australia with Salares’ prospective, large scale lithium brines exploration project in Chile. Upon completion of the proposed transaction, the combined entity will be well-funded, allowing for immediate expansion of the producing Australian operations to run in parallel with an accelerated exploration program at the Salares brine projects.
The merger will enable Talison, a private company with about 250 customers in China, to expand production to serve a market that’s expected to grow at least six per cent per year for the next decade.Total global production of lithium carbonate is about 100,000 to 150,000 tonnes per year, at contract prices ranging from $5,000 to $6,500 per tonne.
Applications include soldering flux, lubricants, focal lenses and ceramics, as well as high-performance batteries.Aside from electronic vehicles, future applications may include high-voltage batteries to store electricity from green sources such as wind turbines.Talison chairman Peter Robinson noted in a telephone interview that the six-per-cent-growth estimate did not take into account any demand jump that would emerge from a surge in the manufacture of electric vehicles.
From Salares’ point of view, the deal represents an estimated 98-per-cent premium to its current trading range of about 60 cents Cdn per share, and makes the combined company the world’s only publicly traded pure play on lithium.
The Boards of Salares and Talison believe the benefits of the merger are compelling, with:
- An attractive diversified mix of lithium mineral and brine assets in both Australia and Chile:
- Combination of the high quality, low cost Australian based lithium minerals production with promising lithium brines exploration properties located in Chile;
- Multiple actionable growth strategies, including:
- Expansion of existing lithium mineral production capacity by over 60% (currently in progress) to support the growing Chinese battery market, with demand from existing customers for over 90% of additional capacity;
- Potential low cost lithium carbonate production from minerals conversion to supply major battery producers and vehicle manufacturers globally; and
- Future potential lithium carbonate production from prospective Chilean brines;
- Access to an extensive global customer network, established over a 25-year lithium operations history, with the leading position in the growing Chinese battery market; and
- Board and management teams with complementary skills and extensive experience in the technical and commercial aspects of project development, production and marketing lithium.
The market dynamics for lithium are positive. Lithium demand has grown consistently over the past decade and is expected to accelerate significantly in the near term from increased consumption of lithium batteries, which are a critical component of hybrid and electric vehicles.
The board of directors of both Talison and Salares unanimously support the proposed transaction. Salares management and directors (together representing 7.43% of Salares shares on a fully diluted basis) have agreed to enter into lock-up agreements to support the transaction.
Merger Proposal
Under the terms of the proposed transaction, which is to be structured as a plan of arrangement (“Plan of Arrangement”) under the British Columbia Business Corporations Act, it is anticipated that common shares of Salares will be exchanged for ordinary shares of Talison1 on the basis of 2.81 Salares shares for one Talison share. All outstanding options and warrants of Salares will be assumed by Talison, and exercisable in accordance with their terms for Talison shares.
Upon completion of the Plan of Arrangement, existing Salares and Talison shareholders will own 20% and 80%, respectively, of the combined company (on a fully diluted basis), prior to the conversion of the Subscription Receipts issued under the CAD$40 million Private Placement (as described below).
