The headline works. Don't write in. Picture: Getty Images
Mining
Here are the biggest resources winners in early trade, Wednesday October 18.
There’s been major movement at M&A station, as the word has passed around, courtesy of an ASX announcement from LPI and a midday investors’ webinar.
As we reported last week, Chilean state copper titan Codelco had been eyeing a deal with Lithium Power International in what shapes as a very tasty outcome indeed for LPI shareholders.
LPI has now confirmed it’s entered into a binding scheme implementation deed with Corporación Nacional del Cobre de Chile (Codelco). It’s a deal that will see Codelco acquire 100% of LPI’s issued capital, valuing the company at approximately A$385 million.
Codelco challenges America’s Freeport McMoran for the status as the world’s largest producer of copper, so this is big coup for LPI, which is massively down share-price-wise, from its ATH of 91c, which it hit in April 2022.
Last week, Bloomberg reported that the two companies were approaching a deal at around 50 cents a share or around $315 million. Well, it’s turned out to be a much better deal for investors than that.
The company notes that “if the scheme is implemented”, LPI shareholders will receive A$0.57 in cash per LPI share. And that represents a significant premium of 119% compared to the undisturbed closing share price of A$0.26 per share on September 26, 2023. It’s also a 136% premium compared to the undisturbed 30-day volume weighted average price of A$0.242 per LPI share.
The LPI share price sits at $0.535, at the time of writing.
merge with its own development in the salt flat to enable a world-class lithium initiative. The purchase is set to be completed in Q1 2024 and aligns with Codelco's strategy for becoming a major supplier of critical metals for the global energy transition, in line with
— 🔴Businesschile🔴 (@topnewschile) October 17, 2023
The LPI board says it “unanimously recommends that LPI shareholders vote in favour of the scheme” and confirms that it, and major shareholder Minera Salar Blanco SpA will be voting in favour.
LPI’s CEO and MD, Cristobal Garcia Huidobro, said:
“The transaction provides certainty for LPI shareholders when compared to a stand-alone development scenario of the Company’s Maricunga Lithium Project and in the context of an uncertain economic outlook more broadly.
“We believe this transaction is a great outcome for LPI shareholders and for other stakeholders including employees, suppliers and the people of Chile, all of whom will benefit from the Maricunga Lithium Project being developed by a large, well-financed and experienced mine developer and producer as Codelco.”
LPI share price
Perth-based Prospect Resources is speeding up the ASX today after reporting a significant new discovery from the Phase 3 diamond drilling programme at its Step Aside Lithium Project in Zimbabwe.
Two scout drill holes returned wide intercepts of strongly mineralised pegmatite from shallow depths, with hole CDD055 returning assays showing 23.08m at 1.03% Li2O from 45m, including 11m at 1.51% Li2O from 54m.
The company also notes that assays are pending for an approximately 40m thick intercept returned from hole CDD056 and abundant coarse spodumene crystals are visible in logged core from both holes.
Cue, the “very excited” bit:
Prospect managing director and CEO Sam Hosack said: “We are very excited by the potential of this new, buried pegmatite discovery at Step Aside.
“Prompt follow-up drilling of WinBin is underway and we look forward to rapidly advancing this new opportunity.”
Here’s a pic, spod enthusiasts…
PSC share price
Firebird Metals, which is hunting for the “forgotten battery metal” manganese in WA, has announced it’s received firm commitments to raise $8 million (before costs) through a strongly supported, heavily oversubscribed placement.
And that’s a deal that comes in at $0.125 per share, which, the company reports, represents a 14% discount to the closing of price of $0.145 on Friday October 13 2023. (It has been under a trading halt this week until today).
As part of the placement, Firebird has secured a cornerstone investment of $1.7 million from Canmax Technologies, which will become the company’s biggest shareholder with a 9.9% interest.
Also, a follow-on investment from Tolga Kumova is in the works in order for the prominent mining investor to maintain his 9.5% holding in the company.
$FRB is pleased to announce that it has received commitments to raise A$8m through a Placement at $0.125., with a cornerstone investment of A$1.7m, from Canmax Technologies who will become the Company’s biggest shareholder with a 9.9% interesthttps://t.co/y9B7wjuDki#manganese pic.twitter.com/mZtCHeHLlu
— Firebird Metals Ltd (@AsxFrb) October 17, 2023
Firebird managing director Peter Allen said:
“This Placement puts Firebird in a very strong position to deliver on our LMFP battery growth strategy and execute our vision of becoming a global leader in the manganese industry with both mining and downstream processing to deliver into the Li-ion and Na-ion battery sectors.”
FRB share price
Andromeda Metals, explorer for niche commodity halloysite kaolin (used in premium ceramic and tech industries) is up double digits today on news of a binding offtake deal with Foshan Gaoming Xing-Yuan Machinery Co.
And that’s a deal for high-quality kaolin from the company’s South Australian (Streaky Bay)-located Great White Project during the first five years of production. The Chinese company is based in Foshan City – a major ceramics production base.
Cam Drummond provides a good breakdown of kaolin, aka “china clay” and its uses here, by the way. But ceramics, eh? Think tiles and porcelain tableware. Okay, think toilets, too, which is where $68.4 million capped ADN is hoping its shares will rise from, thanks to this new deal.
The agreement between the two companies comprises:
• the supply and delivery of a total of 115,000 tonnes of Great White CRM over the five-year period,
• and 5,000 tonnes of Great White KCM 90 in the first year of production
ADN share price
Newfield Resources is up some 33% today, although at this stage it’s not immediately obvious why.
NWF is a diamond hunter with a mine under construction (the Tongo diamond mine) in Sierra Leone and highly prospective exploration licences in Liberia.
The last piece of significant news for the company came in September, when it announced it had made a strategic financial move, raising a combined $16.98 million in equity on two fronts, including the conversion of am existing $13.86 million loan; and implementation of a share placement worth about A$3.11 million.
We’ll update this if/when we learn more.
At Stockhead we tell it like it is. While Prospect Resources is a Stockhead advertiser at the time of writing, it did not sponsor this article.
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