“This Transaction will consolidate the highly prospective Pastos Grandes basin, and creates an exciting opportunity for
“We are very excited to enter into this transaction with Lithium Americas,” said
Figure 1:
BENEFITS TO ARENA SHAREHOLDERS
- An opportunity for Arena Shareholders to realize a meaningful and immediate premium:
- The Consideration to Arena implies a purchase price of
C$0.67 per Arena Share based on the closing price onDecember 19, 2022 ; - Approximately 28% premium to Arena’s closing price based on the closing price on
December 19, 2022 ; and - Approximately 27% premium based on Arena’s 20-day volume weighted average price for the period ending on
December 19, 2022 .
- The Consideration to Arena implies a purchase price of
- By receiving shares of
Lithium Americas , Arena Shareholders will have an opportunity to benefit from future upside potential asLithium Americas shareholders, including:- Participating in upside from Lithium Americas’ diversified portfolio of near-term producing and advanced development assets in
the United States andArgentina , including:- Caucharí-Olaroz in Jujuy,
Argentina (“Caucharí-Olaroz”) with commissioning underway and lithium carbonate production expected in H1 2023; and Thacker Pass inNevada ,United States (“Thacker Pass ”) with a ruling on appeal of Record of Decision expected in early 2023.
- Caucharí-Olaroz in Jujuy,
- Participating in the benefits of developing the Sal de la Puna project being developed alongside Lithium Americas’ Pastos Grandes project;
- Participating in a combined company with increased scale and access to capital supported by a strong balance sheet to execute on growth plans; and
- Participating in the benefits of the potential separation of
Lithium Americas into two public companies to further unlock value.
- Participating in upside from Lithium Americas’ diversified portfolio of near-term producing and advanced development assets in
- In addition, Lithium Americas’ shares are listed on the
New York Stock Exchange (“NYSE”) and theToronto Stock Exchange (“TSX”) and have significantly more trading liquidity compared to the Arena Shares.
BENEFITS TO LITHIUM
- Unlocks development opportunities in the Pastos Grandes basin by combining the Pastos Grandes project and the Sal de la Puna project. Benefits include:
- Integrating the development of the Pastos Grandes project and the Sal de la Puna project, which is expected to result in a larger scale and more optimized development plan and cost synergies for both projects;
- Enhancing Lithium Americas’ team in
Argentina with the addition ofWill Randall and Arena’s team, who are expected to assist in developing the Company’s growth plans in the country; and - Building on progress made through the Technical Collaboration Agreement, of
April 14, 2022 , betweenLithium Americas and Arena, including exploration and planning to optimize the economics of the deposit.
- Bolsters Lithium Americas’ growth pipeline while preserving cash on hand:
- The addition of a complementary resource significantly expands Lithium Americas’ growth pipeline in
Argentina , without distracting management from existing operations; and - The primarily stock acquisition further preserves the Company’s balance sheet flexibility with
US$392 million in cash and short-term bank deposits as atSeptember 30, 2022 .
- The addition of a complementary resource significantly expands Lithium Americas’ growth pipeline in
RECOMMENDATION OF ARENA BOARD OF DIRECTORS
Arena appointed a special committee of independent directors (the “Special Committee”) to consider and make a recommendation to the board of directors of Arena (the “Arena Board”) with respect to the Transaction. After consultation with its financial and legal advisors, and on the unanimous recommendation of the Special Committee, the Arena Board (with
The Special Committee received a fairness opinion from Stifel GMP., which was retained on a fixed-fee independent fairness opinion basis, which states that as of the date of such opinion and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by Arena Securityholders pursuant to the Transaction is fair, from a financial point of view, to the Arena Securityholders (other than
TRANSACTION CONDITIONS AND TIMING
The Transaction will be effected by way of a court-approved plan of arrangement under the Business Corporations Act (
The Transaction provides for, among other things, customary Arena Board support and non-solicitation covenants, with a “fiduciary out” that would allow Arena to accept a superior proposal, subject to a “right to match” period in favour of
All directors and senior officers of Arena have entered into support and voting agreements pursuant to which they have agreed to vote their Arena securities in favour of the Transaction.
Pursuant to the Arrangement Agreement, unless otherwise excluded, all outstanding Arena warrants (“Arena Warrants”) and stock options, which remain unexercised at the effective time of the Transaction, will be deemed to be exercised on a “cashless exercise” basis under the arrangement for Arena Shares, which will be exchanged for LAC Shares at the Exchange Ratio.
Ganfeng Lithium Co. Ltd.,
Subject to certain conditions, including the Parties obtaining the requisite regulatory approvals, the Transaction is expected to close by Q3 2023.
Upon closing of the Transaction, the Arena Shares are expected to be concurrently delisted from the TSX-V. The delisting is conditional upon TSX-V approval.
Further details of the Transaction are set out in the Arrangement Agreement and will be included in a management information circular of Arena that is expected to be mailed to Arena Securityholders in
This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
ADVISORS AND COUNSEL
ABOUT
For further information contact:
Investor Relations
Telephone: 778-656-5820
Email: ir@lithiumamericas.com
Website: www.lithiumamericas.com
ABOUT ARENA
Arena owns 65% of the
For further information contact:
Website: www.arenaminerals.com
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE
This news release may contain certain “Forward-Looking Statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to the Transaction, including statements with respect to the expected benefits of the Transaction to the Arena Shareholders or
Such statements represent the Lithium Americas’ and/or Arena’s (collectively, the “Parties” and individually, a “Party”) current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by each Party, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Risks and uncertainties include, but are not limited to the following: ability of the Parties to complete the Transaction, the timing of any completion and the terms and conditions upon which the Transaction is completed; ability to satisfy or waive all conditions to closing the Transaction as set out in the Arrangement Agreement; Arena Securityholders approving the Transaction; the ability of the consolidated entity to realize the benefits anticipated from the Transaction and the timing to realize such benefits; unanticipated changes in market price for LAC Shares; changes to the applicable Party’s current and future business plans and the strategic alternatives available thereto; growth prospects and outlook of Lithium Americas’ business, including commencing commercial production at the Cauchari-Olaroz project; treatment of the transaction under applicable anti-trust laws and the Investment Canada Act; regulatory determinations and delays; any impacts of COVID-19 on the business of the consolidated entity and the ability to advance the Pastos Grandes project; stock market conditions generally; demand, supply and pricing for lithium; and general economic and political conditions in
Additional risks, assumptions and other factors upon which forward-looking information is based, as it pertains to
Although each Party has attempted to identify important risks and assumptions, given the inherent uncertainties in such forward-looking information, there may be other factors that cause results to differ materially. Forward-looking information is made as of the date hereof and the Parties do not intend, and expressly disclaim any obligation to update or revise the forward-looking information contained in this news release, except as required by applicable law. Accordingly, readers are cautioned not to place undue reliance on forward-looking information.
Figure 1
Pastos Grandes Basin , Salta, Argentina
2022 GlobeNewswire, Inc., source