CATL buys into Neo Lithium
Chinese battery giant CATL is taking a roughly $8.5 million Canadian dollar-stake in mining company Neo Lithium in exchange for about eight per cent of the company’s stock. The Canadian company holds mineral and surface rights to a newly discovered lithium salar and brine reservoir complex in Argentina.
The Chinese battery cell manufacturer has taken out around ten million common shares in Neo Lithium at a price of 0.84 Canadian dollars via a subsidiary, resulting in the above-mentioned gross proceeds of around 8.5 million Canadian dollars (just under 5.5 million euros). In return, CATL will send a director to Neo Lithium’s board, receive a right of first refusal on future share issuances, and will be given a seat on the technical committee advancing the final feasibility study for the Argentina project called 3Q (Tres Quebradas).
As part of Q3, Neo Lithium aims to reach a production capacity of approximately 20,000 tons per year of battery-grade lithium carbonate in the Argentine province of Catamarca. The Canadian company maintains the ability to increase capacity to as much as 40,000 tons per year. In May 2019, Neo Lithium prepared a pre-feasibility study for this purpose. With CATL now onboard, the Canadian company is now backed by the biggest player in the battery industry.
“The closing of the CATL strategic investment validates the quality of our 3Q project and the capabilities of our management team,” says Constantine Karayannopoulos, chairman of Neo Lithium. He added that the company will work with CATL to bring 3Q to full development through the establishment of a comprehensive financing plan.