ASX-listed Sayona Mining and Piedmont Lithium are set to merge in a move that will create the largest hard-rock lithium producer in the US.
The deal has been struck through a definitive agreement, under which Sayona and Piedmont will combine to create a leading lithium business, with Sayona to become the parent entity.
Existing Piedmont shareholders will receive Sayona American depository shares (ADSs) corresponding to 527 ordinary Sayona shares for each Piedmont share held, and existing Piedmont shareholders of CHESS depository interests (CDI) will receive 5.27 Sayona ASX-listed shares for each Piedmont CDI held.
The transaction will result in an approximate 50:50 equity holding for Sayona and Piedmont shareholders on a fully diluted basis following the deal’s closing.
Piedmont will undertake a proposed capital raise of approximately $US27 million ($41.3 million), and Sayona will undertake a capital raise of $40 million. Once the transaction closes, Sayona will also undertake a conditional placement for $69 million.
The approximate $150 million in equity raisings are expected to ensure the merged entity – which is yet to be named – is positioned to accelerate growth within its enlarged portfolio.
“This merger marks a transformative step for Sayona and Piedmont, creating a leading North American lithium producer with the scale and capabilities to meet the growing demand for lithium products,” Sayona managing director and chief executive officer (CEO) Lucas Dow said.
“We believe our combined resources and expertise will enable us to deliver significant value to our shareholders and stakeholders. We are excited about the opportunities this merger presents to accelerate our growth plans and enhance our strategic flexibility.”
Australian-based Sayona has three lithium assets in development in Québec, Canada and 12 mining leases for lithium and gold tenure in Western Australia, and US-based Piedmont has two lithium projects in North America and one in Ghana.
The North American Lithium (NAL) operation in Québec is jointly owned by Sayona and Piedmont via a 75:25 partnership. NAL has produced approximately 140,000 tonnes of spodumene concentrate since its restart in March 2023. By merging, Sayona and Piedmont will consolidate NAL’s ownership.
The merger will also “create a simpler and stronger lithium business” positioned to grow through commodity cycles, like the downturn lithium has experienced throughout 2024.
Other benefits of the deal include:
- a combined lithium ore reserve estimate equalling 70.4 million tonnes (Mt) at 1.15 per cent lithium oxide and mineral resource estimate totalling 153.5Mt at 1.15 per cent lithium oxide
- strategic flexibility to combine and optimise downstream strategies
- material corporate, logistics, marketing, and procurement synergies
- a simplified corporate structure
- economic alignment to pursue NAL brownfield expansion
- a strengthened balance sheet with the ability to fund and accelerate growth projects.
“This merger combines two complementary businesses and will create a larger and stronger company,” Piedmont president and CEO Keith Phillips said.
“MergeCo will be North America’s largest lithium producer and will have an attractive growth profile with three DFS-stage development projects and an exciting near-term brownfield expansion opportunity at NAL.
“The merger financing, corner-stoned by leading mining private equity group RCF (Resource Capital Funds), will enable us to weather the current industry downturn while making intelligent investments in our growth projects to be positioned for the recovery in lithium markets that we expect in the medium-term.
“MergeCo will be domiciled in Australia but will maintain a listing on Nasdaq and a strong commitment to our Carolina lithium project and our US headquarters in Belmont, North Carolina.”
If successful, Dow will become the merged entity’s managing director and CEO and Phillips will become a strategic advisor for a transition period.
The transaction is subject to shareholder approval and is expected to close in the first half of 2025.