Hawkstone’s US lithium deal is back on; shares spike 82pc
Hawkstone Mining’s acquisition of USA Lithium is back on the table after the junior ASX-listed explorer managed to strike a new $5.5 million all-scrip deal.
The company (ASX:HWK) told investors less than two weeks ago it had backed out of the planned acquisition because the two parties could not agree on terms.
US Lithium owns two lithium projects – Big Sandy in Arizona and Lordsburg in New Mexico.
Hawkstone says it has now reduced the risk of the acquisition with a condition that half of the purchase price be payable only once the company has defined a 30 million tonne (Mt) resource.
The shares jumped nearly 82 per cent on the news to an intra-day high of 4c — but fell back to 2.9c by 12.15pm AEST.
The company has agreed to issue a total of 250 million shares, which are worth $5.5 million based on Hawkstone’s share price last Thursday before it went into a trading halt.
Hawkstone will issue 125 million shares once the deal has received shareholder approval and the remaining shares will be issued once a 30Mt resource has been defined.
“The board considers the revised terms significantly de-risk the acquisition for Hawkstone
shareholders as 50 per cent of the consideration is now contingent on the announcement of a 30Mt inferred resource at Big Sandy,” director Oonagh Malone said.
USA Lithium is about to begin a 16-hole drilling program at the Big Sandy project.
Hawkstone plans to undertake a placement to raise $2.75 million to fund exploration.