Lithium Power International Ltd (fka LTHHF)

[Dr_Vonschellan]

Cost_to break_deal with Codelco_is only_a piddling_US$2.4M
The Codelco and Lithium Power agreement: 100 pages, the operation schedule and a fine for withdrawal
https://www.msn.com/es-cl/noticias/other/el-acuerdo-de-codelco-y-lithium-power-100-p%C3%A1ginas-el-calendario-de-la-operaci%C3%B3n-y-una-multa-por-retractaci%C3%B3n/ar-AA1irLFy
Google English translation below

The Doctor
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The Codelco and Lithium Power agreement: 100 pages, the operation schedule and a fine for withdrawal
Codelco advances its plans to enter the lithium business. Despite the complex moment it is going through in copper - its main business during the five decades of history of the state-owned company -, this Tuesday afternoon marked one of the biggest milestones for the copper company in its recent history: the agreement to purchase for US$244 million 100% of the shares of Lithium Power International (LPI), the firm that owns the Salar Blanco lithium project, in the Maricunga Salt Flats, which will allow it to accelerate its commitment to enter the lithium business.

The acquisition of the Australian firm, its neighbor in the second salt flat with the highest concentration of lithium known in the world - only surpassed by the Salar de Atacama -, consolidates the position of the Chilean mining company in the deposit. There, Codelco has assets for nearly 2,500 hectares, while Salar Blanco contributes another 2,541 hectares, although only 1,125 are from before 1979, the year in which lithium was reserved exclusively for the State.

In Maricunga, Codelco only concluded the salt flat exploration campaign in April of this year, which yielded promising results. At the time of making public the lithium concentrations found in different drillings, the state company indicated that the first economic profile study of its project would be carried out at the beginning of 2024.

Codelco's incursion into Maricunga began in 2016, when the second government of Michelle Bachelet instructed the mining company to analyze the feasibility of a business model for the use of the Maricunga and Pedernales Salt Flats.

The schedule for the purchase of LPI

This Wednesday, further details of the agreement between the Chilean state company and the Australian firm were known. LPI made public some terms of the purchase and sale agreement, a document prepared by Ashurst, a law firm that acted as legal advisor to the Australian firm. The 100-page text was signed by the outgoing Vice President of Administration and Finance of Codelco, Alejandro Rivera; in addition to its executive president, Rubén Alvarado, and was also signed by two directors of LPI: David Hannon and Andrew Phillips.

The document details that conversations between the parties formally began on August 21, the date on which they signed a confidentiality agreement.

According to the information published by LPI, the plan that was launched yesterday contemplates that the acquisition be approved by the Australian Court of Justice. This body would hold its first hearing to begin analyzing the transaction on December 13. Two days later, LPI shareholders will receive a report with the details of the agreement, which will explain the reasons that the ocean company's board of directors had for unanimously recommending approval of the agreement, as well as a report from an independent expert on the benefits that giving the green light to the transaction will bring to shareholders.

The calendar continues with two additional meetings, but they will take place next January. On the 23rd of that month, the Australian company's shareholders are scheduled to meet to vote on the proposal. The operation requires the approval of at least 75% of the shares to be approved. Then, on the 29th, the court will hold a second hearing to review the transaction, and the next day, at the end of the first month of next year, the agreement would go into effect.

Thus, if all subsequent stages make the transaction viable, the purchase and sale contract would be formalized on February 1, and its implementation would finally occur seven days later.

The deal contains standard exclusivity clauses, including restrictions on LPI not buying, speaking or initiating further due diligence, plus a fee of A$3.8 million (about US$2.4 million) in any event of the parties decides to break with the agreement.

Cristóbal García-Huidobro, CEO of Lithium International Power, assessed that the agreement reached with Codelco “offers LPI shareholders the opportunity to realize an attractive amount in cash,” stating that the agreed price “reflects a compelling premium of 119%” over the closing price of the share on September 26, 2023, a day that reflected the last transactions of the paper before LPI recognized that talks with Codelco were underway.

“The transaction provides certainty to LPI shareholders compared to a stand-alone development scenario for the Company's Maricunga Lithium Project and in the context of an overall uncertain economic outlook,” he added.