Millennial Lithium (ML.V) has signed an agreement with Liberty One Lithium (LBY.V) whereby the latter can earn an interest of up to 80% in the Pocitos West lithium project, which consists of almost 16,000 hectares of land in Argentina’s Salta province.
Liberty One Lithium will be required to pay a total of US$5.5M in cash payments, and to commit at least US$1M in exploration activities to earn an initial 70% interest, and the cash payment schedule seems to be very advantageous for Milennial Lithium. It will receive US$600,000 by the closing date, an additional $600,000 one year thereafter, followed by 3 more tranches of US$600,000 every six months there after with a balloon payment on the third anniversary of the agreement.
The annual cash inflow of in excess of C$1.5M per year will take care of Millennial’s own commitments to acquire Pocitos (as the Liberty payment schedule is similar to Millennial’s required payments). Basically, Millennial Lithium acquires the property for US$4.5M in cash, and is now selling a 70-80% stake for US$5.5M in cash and US$1M in exploration expenditures, and that’s a very acceptable deal.
In other news, Millennial Lithium has also strengthened its board of directors with the appointment of Richard Lacroix, Farhad Abasov and Peter MacLean. The first two have extensive experience in the fertilizer industry with key roles at Allana Potash (Sold to Israel Chemicals (ICL) ), Potash One and Potash Corp of Saskatchewan (POT.TO, POT) which will merge with US agriculture giant Agrium (AGU). Abasov will also be Millennial’s new CEO, and it’s very intriguing to see Millennial Lithium appointing someone with extensive experience in M&A (Allana, Potash One and Energy Metals, three of Abasov’s four previous employers, were acquired by larger players in the sector).Go to Millennial’s website
The author has a long position in Millennial Lithium and Liberty One Lithium. Millennial Lithium is a sponsor of the website. Please read the disclaimer