- Alpha Lithium (ALLI) has secured a US$30 million investment from Uranium One with rights to US$185 million more
- Uranium One manages one of the world’s largest uranium portfolios with assets in eastern Europe, Africa and South America
- Alpha’s plans for the proceeds include the completion of a feasibility study and the construction of production facilities up to 10,000 tonnes per year LCE
- Alpha Lithium develops lithium salar assets in Argentina
- Alpha Lithium (ALLI) is up by 15.45 per cent and is currently trading at $1.42 per share
Alpha Lithium (ALLI) has secured a US$30 million investment from Uranium One with rights to US$185 million more.
Uranium One is a wholly-owned subsidiary of the Russian State Atomic Energy Corporation. It manages one of the world’s largest uranium holdings with a diversified portfolio of projects in Kazakhstan, Tanzania, Namibia and South America.
The US$30 million investment grants Uranium One a 15-per-cent stake in Alpha’s 27,500-hectare Tolillar Salar in Argentina. The transaction includes an option to acquire another 35 per cent for US$185 million.
Once closed, the transaction is expected to leave Alpha with US$45 million in cash for expansion and development efforts in the Salar del Hombre Muerto, one of the world’s most significant sources of lithium.
Alpha plans to use the initial US$30 million for:
- Additional developmental drilling and geophysical data gathering
- Construction of a permanent on-site camp to house up to 400 personnel
- Securing natural gas, electricity and water supplies for commercial production
- Construction of a five-tonne-per-year LCE pilot plant to provide proof of concept for Tolillar’s flow sheet
- Completion of a feasibility study
Uranium One may exercise its option upon completion of the feasibility study. Alpha would retain a 50-per-cent interest in Tolillar, which would be fully funded up to the point of commercial production. Depending on Tolillar’s NPV, Alpha may also receive a bonus payment up to a maximum of US$75 million.
The company plans to use the US$185 million for the construction of an initial 10,000-tonnes-per-year LCE commercial production facility. Uranium One’s option, if exercised, provides it with:
- Operatorship of the Tolillar Project
- Control of Alpha’s Board of Directors
- Marketing rights for 100 per cent of the market-rate offtake from the initial production facility with Alpha retaining 50 per cent of the offtake’s economics
Brad Nichol, Alpha’s President and CEO, stated,
“This early-stage asset has attained a truly game-changing breakthrough for our shareholders. This sort of milestone is rarely achieved by a company with less than two years of operations and with a valuation at this level. Including the maximum additional consideration, the implied project value would be US$604 million, which is over C$750 million for the Tolillar asset alone.”
Andrey Shutov, President of Uranium One, added,
“In alignment with our stated strategy of securing non-uranium mineral resources, Uranium One is very excited to work with the famous Alpha Lithium team to advance the Tolillar Project.”
Alpha Lithium develops lithium salar assets in Argentina.
Alpha Lithium (ALLI) is up by 15.45 per cent and is currently trading at $1.42 per share as of 1:58 pm EST.