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International Lithium Corp. to Dispose of Its Stake in Mariana to Ganfeng for CAD$ 16.8m
Vancouver, British Columbia--(Newsfile Corp. - September 21, 2021) - The board of Internationa...
About this update from Ilc Critical Minerals Limited
[{"type":"text","content":"International Lithium Corp. to Dispose of Its Stake in Mariana to Ganfeng for CAD$ 16.8mVancouver, British Columbia--(Newsfile Corp. - September 21, 2021) - The board of International Lithium Corp. (TSXV: ILC) (the \"Company\" or \"ILC\") is pleased to announce that it has agreed to the sale of its remaining 8.58% stake in Litio Miñera Argentina S.A. \"LMA\", the company owning the Mariana lithium salar project in Argentina, and also to sell its other rights in the project, including the right to acquire a further 10% in the Mariana project. The legal entity acquiring is Ganfeng Lithium Netherlands Co., B.V., a subsidiary of the Company's partner Ganfeng Lithium Co. Ltd, and it will purchase the interest for about USD 13.16m (approximately CAD$ 16.8m) payable in cash. Immediately following the sale, ILC will repay to another Ganfeng subsidiary GFL International Co., Ltd an exploration loan taken by the Company from GFL in 2014 of USD 2.0m, plus accrued interest at 10% p.a. After repaying the exploration loan plus interest, ILC will be left with USD 10m (approximately CAD$ 12.8m) from the transaction.BackgroundThe Company announced recently in a Chairman's Statement included within the July 8, 2021 news release that the board, after a strategic review of the options, had decided to seek to sell its remaining stake in Mariana. Foremost in this decision was the awareness that Ganfeng intended to invest USD 575m in the Mariana project over the next three or so years, and the strong feeling that even if financing the Company's share of this was feasible, the resulting dilution to existing shareholders on other projects would have been so significant as to undermine the investment case. Moreover, had the Company at any stage not been able to or decided not to raise sufficient funds and had the Company's stake in LMA/Mariana fallen below 5%, the Company's stake in LMA would, under a 2014 agreement between the Company and Ganfeng, have been substituted with a 1% net smelter royalty which would not have started to pay until 2025 or later.Good progress was made on discussions with some substantial companies who had an interest in acquiring the Company's stake and also the financial ability to make the further investment needed, but in the end the board of the Company decided to progress its discussions with Ganfeng. Clearly as the 91...