Allkem and Livent Merger to Create $10.6 Billion Lithium Manufacturer

May 11, 2023 at 10:11 AM EDT

Allkem and Livent Corp have agreed to a $10.6 billion all-stock merger on Wednesday, creating the world’s third-largest lithium manufacturer, highlighting surging demand for the battery metal used in electric vehicles (EVs).

Combining US-based Livent with Allkem in Australia creates a four-continent industrial giant that executives say would deliver the additional expertise needed to expand supply of the metal to an increasingly hungry automotive sector, including Tesla, General Motors, and BMW.

Allkem and Livent run lithium brine facilities in Argentina that are around 10 km (6.2 miles) away, and they are both developing hard rock lithium mines in the Canadian province of Quebec that are less than 100 km (62 miles) apart. Livent CEO Paul Graves believes that combining the companies will speed up the development of those initiatives.

Allkem, which also mines hard rock lithium in Australia, has a chemical conversion facility in Japan, and is a pioneer in the emerging field of direct lithium extraction (DLE), which is seen as a tantalizing prospect for producing more battery metal faster than traditional mining methods.

Allkem shareholders will receive one share in the combined entity for each share they own under the agreement and the company will eventually own 56% of the new firm. For each existing share of Livent, shareholders will receive 2.406 shares in the new company.

Graves will lead the new firm as CEO, with Allkem’s Peter Coleman serving as chairman. The unnamed corporation will be listed on the NYSE and headquartered somewhere in the United States.

Analysts believe the new company’s global mining and processing assets are solid growth indicators.

Despite the South American country’s socio economic troubles, Graves believes the new company’s growth prospects in Argentina are particularly promising.

He also urged the US to adopt a free trade agreement with Argentina, which would make Argentine lithium eligible for EV tax incentives, which are central to the Biden administration’s 2022 strategy.

When all expansion projects are considered, the combine would become the world’s third-largest lithium producer by volume, after Albemarle Corp of the United States and SQM of Chile. Ganfeng Lithium Group and Tianqi Lithium Corp of China are other important competitors.

In Canada, E3 Lithium Ltd (TSXV:ETL) (OTCQX:EEMMF) has the largest Measured and Indicated lithium resource. E3 Lithium‘s combined resources, including the Clearwater project, are being developed in Alberta on the backbone of the experienced and sophisticated oil and gas industry, allowing the company to expedite its development.

Manufacturing High Purity, Battery Grade Lithium

The mineral property resource company focused on the exploitation of its large mineral potential in Alberta, Canada, has developed a proprietary Direct Lithium Extraction (DLE) process.

E3 Lithium is progressing with the development of its field pilot project, which will showcase ion-exchange direct lithium extraction technology in real-world operational settings. E3 plans to significantly derisk its Alberta lithium project by demonstrating the process at a pilot scale as it approaches the commercial size of 20,000 tonnes/year of lithium hydroxide monohydrate production.

E3 Lithium‘s Facility Application for its 2023 field pilot plant was recently approved by the Alberta Energy Regulator (AER). The AER license permits E3 to build and operate the equipment required to carry out the direct lithium extraction pilot, which is scheduled to commence operations in the third quarter of 2023.

The field pilot plant will be built in E3‘s Clearwater Project Area, east of Olds, at the first well drilled as part of E3‘s 2022 first drill program. E3 released the criteria and schedule for the field pilot on February 2, 2023.

E3 will provide updates on its field pilot throughout 2023.

E3 Lithium has upgraded its mineral resource to 16.0 Mt LCE of Measured & Indicated and 0.9 LCE of Inferred Mineral Resources.

Natural Resources Canada data show that Canada now has 3.2 Mt of M&I lithium resources in hard rock deposits, implying that E3’s 16.0 Mt of LCE M&I is the country’s largest M&I lithium resource.

E3 Lithium just announced their fourth-quarter and fiscal-year 2022 results. Highlights from last year included receiving $27 million from the Government of Canada’s Strategic Innovation Fund, signing a $5 million strategic agreement with Imperial Oil, and signing a memorandum of understanding with Pure Lithium, which produced a lithium metal battery using E3‘s lithium concentrate.

E3 Lithium successfully manufactured its first batch commercial scale sorbent, which is critical to the success and commercialization of its ion-exchange DLE technology, and drilled the first two brine production wells at the Clearwater Project to evaluate lithium and sampled three wells, confirming the aquifer’s producibility and lithium concentrations in its proposed production area over the past year.

The E3 Lithium 43-101 Technical Report: Lithium Resource Estimate, Bashaw District Project, Central Alberta has been filed by the Company.

For more information about E3 Lithium Ltd (TSXV:ETL) (OTCQX:EEMMF), please visit this link or their website at e3lithium.ca.

Featured Image @ Pixabay

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6) This document contains forward-looking information and forward-looking statements, within the meaning of applicable Canadian securities legislation, (collectively, “forward-looking statements”), which reflect management’s expectations regarding E3 Lithium Ltd.’s future growth, future business plans and opportunities, expected activities, and other statements about future events, results or performance. Wherever possible, words such as “predicts”, “projects”, “targets”, “plans”, “expects”, “does not expect”, “budget”, “scheduled”, “estimates”, “forecasts”, “anticipate” or “does not anticipate”, “believe”, “intend” and similar expressions or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative or grammatical variation thereof or other variations thereof, or comparable terminology have been used to identify forward-looking statements. These forward-looking statements include, among other things, statements relating to: (a) revenue generating potential with respect to E3 Lithium Ltd.’s industry; (b) market opportunity; (c) E3 Lithium Ltd.’s business plans and strategies; (d) services that E3 Lithium Ltd. intends to offer; (e) E3 Lithium Ltd.’s milestone projections and targets; (f) E3 Lithium Ltd.’s expectations regarding receipt of approval for regulatory applications; (g) E3 Lithium Ltd.’s intentions to expand into other jurisdictions including the timeline expectations relating to those expansion plans; and (h) E3 Lithium Ltd.’s expectations with regarding its ability to deliver shareholder value. Forward-looking statements are not a guarantee of future performance and are based upon a number of estimates and assumptions of management in light of management’s experience and perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances, as of the date of this document including, without limitation, assumptions about: (a) the ability to raise any necessary additional capital on reasonable terms to execute E3 Lithium Ltd.’s business plan; (b) that general business and economic conditions will not change in a material adverse manner; (c) E3 Lithium Ltd.’s ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; (d) E3 Lithium Ltd.’s ability to enter into contractual arrangements with additional Pharmacies; (e) the accuracy of budgeted costs and expenditures; (f) E3 Lithium Ltd.’s ability to attract and retain skilled personnel; (g) political and regulatory stability; (h) the receipt of governmental, regulatory and third-party approvals, licenses and permits on favorable terms; (i) changes in applicable legislation; (j) stability in financial and capital markets; and (k) expectations regarding the level of disruption to as a result of CV-19. Such forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of E3 Lithium Ltd. to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: (a) E3 Lithium Ltd.’s operations could be adversely affected by possible future government legislation, policies and controls or by changes in applicable laws and regulations; (b) public health crises such as CV-19 may adversely impact E3 Lithium Ltd.’s business; (c) the volatility of global capital markets; (d) political instability and changes to the regulations governing E3 Lithium Ltd.’s business operations (e) E3 Lithium Ltd. may be unable to implement its growth strategy; and (f) increased competition.

Except as required by law, E3 Lithium Ltd. undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future event or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Neither does E3 Lithium Ltd. nor any of its representatives make any representation or warranty, express or implied, as to the accuracy, sufficiency or completeness of the information in this document. Neither E3 Lithium Ltd. nor any of its representatives shall have any liability whatsoever, under contract, tort, trust or otherwise, to you or any person resulting from the use of the information in this document by you or any of your representatives or for omissions from the information in this document.

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