IGO Group and Tianqi have paid $136 million to acquire lithium explorer Essential Metals.
The two companies have acted in partnership on lithium matters since late 2020, with the latest acquisition allowing a foothold in the WA lithium production zone between Kalgoorlie and Norseman.
Under their Tianqi Lithium Energy Australia (TLEA) umbrella, the two companies have signed a binding scheme implementation agreement (SIA) with Essential Metals to enact a scheme of arrangement.
The consideration for the scheme is $0.50 per share, equating to a $136 million equity value for Essential Metals.
Essential Metals has been drilling Pioneer Dome, an early-stage deposit that is currently years from development.
Pioneer Dome is located about 600km from Greenbushes, Australia’s biggest and best lithium mine in which IGO and Tianqi have a 51 per cent stake.
Greenbushes is expected to run for at least another 20 years, suggesting IGO and Tianqi’s acquisition confirms their desire to push into a new lithium province rather than simply extending the existing hub.
“We believe this transaction is a great outcome for Essential shareholders and for other stakeholders, including employees, suppliers, the Ngadju people and the state of Western Australia, all of whom will benefit from the Pioneer Dome lithium project being developed by a large, well-financed and experienced lithium sector participant as is TLEA,” Essential managing director Tim Spencer said.
IGO acting chief executive officer Matt Dusci provided some insight into the proposal.
“Both IGO and TLC are committed to progressing and growing our lithium joint venture business,” he said.
“The ESS transaction provides an opportunity to accelerate lithium exploration to bring new resources to production.”