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Image: Altura Mining.

Pilbara Minerals has secured a conditional agreement to acquire Altura Mining’s lithium operations, including the Pilgangoora site that neighbours its own flagship mine in Western Australia.

Under the $US175 million ($248 million) proposal, Pilbara Minerals would acquire the shares in Altura subsidiary Altura Lithium Operations, which operates the Pilgangoora project.

Altura Lithium’s loan noteholders have voted in favour of the Pilbara Minerals arrangement for Altura Lithium Operations, should the acquisition go ahead.

Pilbara Minerals has also procured the right to match any competing proposal offered for the Altura lithium project and has secured payment of a break fee should Altura noteholders vote against the acquisition.

The company has agreed to pay an upfront cash payment of $US155 million and deferred consideration of $US20 million for the Altura Lithium Operations shares.

Pilbara Minerals managing director Ken Brinsden said the acquisition of Altura Lithium Operations would be a logical step for the company to combine two neighbouring operations.

“This potential acquisition represents a logical consolidation of two neighbouring operations to unite the greater Pilgangoora orebody,” Brinsden said.

“If successful, the acquisition will cement Pilbara Minerals’ position as the largest pure-play ASX-listed lithium company by enterprise value and will provide strong leverage to the expected recovery in lithium prices, driven by demand for electric vehicles and energy storage applications.

“We believe this will help safeguard jobs in the Western Australian lithium sector and ultimately create some exciting new growth opportunities that will deliver a range of benefits for the local economy.”

Pilbara Minerals’ Pilgangoora lithium-tantalum project is just 30 minutes by road from Altura’s lithium project.

If it is successful acquiring Altura, the share sale agreement is expected to be executed in early December.

Pilbara Minerals stressed that there is no guarantee it will be successful in acquiring the Altura project and before it proceeds, Altura manager and receiver KordaMentha will formally market Altura Lithium Operations and its assets for sale.

KordaMentha intends to place the Altura project on care and maintenance to preserve near-term cash flow to maximise value to creditors.