Hawkstone Mining says it’s not going ahead with the acquisition of USA Lithium – news that sent shares down 27 per cent on Friday morning.

The company (ASX:HWK) — which was formerly South African-focused coal miner ZYL — told investors a deal could not be reached between the two parties.

The acquisition would have added two lithium projects – the Big Sandy lithium clay project in Arizona and the Lordsburg lithium brine project in New Mexico – to its portfolio.

As part of the deal, well known mining personality Klaus Eckhof was set to join the board.

The shares had slipped to an intra-day low of 1.6c by 1.20pm AEST Friday.

When it was known as ZYL, the company was trying to advance its anthracite projects in South Africa, but ended up in administration.

Anthracite is a high-quality coal.

Hawkstone Mining (ASX:HWK) shares over the past year.
Hawkstone Mining (ASX:HWK) shares over the past year.

The company emerged from administration early last year and resumed work on its Kangwane South anthracite project, but also started the hunt for new opportunities.

“Hawkstone will retain its interest in the Kangwane South anthracite project in South Africa and will continue to pursue a strategy to identify opportunities to create shareholder value,” the company said.

Hawkstone has been contacted for comment.