Tomorrow Investor

Lithium Americas Expands Argentine Holdings Through Buyout


In a bid to expand its access into the lithium-rich Pastos Grandes basin in Argentina, Vancouver-based lithium mining firm Lithium Americas recently bought out all the remaining shares it currently doesn’t own from Canadian compatriot company Arena Minerals.

Prior to the transaction, the remaining shares that Lithium Americas didn’t own were owned by China’s Ganfeng Lithium and its affiliate companies. The Ganfeng group collectively owned approximately 16% of Arena’s outstanding shares, along with several warrants that would make up an additional 6% stake in the enterprise.

According to a statement from Lithium Americas, Ganfeng has agreed to dispose of all its securities pertaining to Arena before the merger is finalized.

Said to be valued at around $227 million, the buyout is seen as a great opportunity for Arena’s current shareholders. Under the agreement, Arena shareholders expect to receive 0.0226 of a Lithium Americas common share for each full Arena share they hold. Therefore, those who invested in Arena own around 5.7% of Lithium Americas.

Combining Initiatives for Better Chances

This move on the part of Lithium Americas is a strategic one as it seeks to merge two neighboring or near-adjacent mining projects operated by Arena within Pastos Grandes, which is on the Argentine side of the South American Lithium Triangle, with the one Lithium Americas operated in Caucharí-Olaroz.

This joint lithium brine extraction and processing initiative are expected to begin within the first half of 2023.

According to Lithium Americas chief executive officer Jonathan Evans, the significant synergies between his company’s initiative and Arena’s will be augmented by an improved understanding of the basin, thus leading to greater development within the area. Both companies can adjust their respective plans and maximize their joint growth pipeline in Argentina.

Same Team, Different Entities

While the deal has yet to be finalized by around the third quarter of next year, Lithium Americas is currently undergoing a corporate transformation that seeks to separate its North American and Argentine operations into two separate public companies.

Evans will continue to lead the reorganized Lithium Americas organization to handle initiatives in North America. These include the Thacker Pass lithium project in the Nevada desert, as well as investments in Ascend Elements and Green Technology Metals.

Lithium International, the second company to be formed, will specifically focus on the parent company’s assets in Argentina, which now include both Caucharí-Olaroz and Pastos Grandes.

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