Cadence (KDNC ) has completed the sale of its 31.5% stake in Lithium Technologies and Lithium Supplies ("LT and LS") to Evergreen PTY Ltd.
The sale has been finalised at A$21.05 million or £12.08 million for 100% of LT and LS, as agreed by Cadence and all LT and LS shareholders. For its 31.5% stake, Cadence has received A$3.16m or £1.81m in Evergreen shares so far. If Evergreen reaches certain performance benchmarks, Cadence will receive a total of A$6.63m or £3.80m.
Via their subsidiaries, LT and LS hold two exploration licenses in Australia's Northern Territory, one of which has been granted and another in the application phase. LT and LS also hold seven exploration license applications in Argentina. All of these licenses and applications target hard rock lithium deposits, the most significant of which is the Litchfield Lithium Prospect in Northern Australia, contiguous to Core Lithium's Finniss Lithium Project (JORC compliant ore reserves: 7.4Mt @ 1.3% Li2O).
Over the next 3 years, Evergreen will spend a minimum of A$4m or £2.26m on exploration of the Litchfield Lithium Prospect. Evergreen is currently unlisted, but intends to list on the Australian stock exchange.
Cadence CEO Kiram Morzaria commented on the transaction:
"On behalf of the Cadence board and other LT and LS shareholders, we are pleased to report the completion of the sale of our investment in LT and LS
...
Recent exploration and sampling work at the Litchfield project, along with the project's proximity to Core Lithium's assets have led us to believe that Litchfield has considerable potential to host lithium mineralisation.
...
For Cadence, this transaction provides an excellent opportunity to retain exposure to the booming hard rock lithium market in Australia. The consideration is being paid entirely in shares, and given that Evergreen intends to list on the Australian Stock Exchange, we will potentially have exposure to any future upside. Hard rock lithium assets have seen excellent returns of late, plus we also have a commitment that Evergreen will spend at least A$4 million to explore the primary assets."
Cadence also issued an update this morning on its Amapa Iron Ore Project in Brazil. The focus at Amapa is still on delivering a Pre-Feasibility Study (PFS), and Cadence expects to publish a Maiden Ore Reserve on Amapa prior to the PFS.
Additionally, the Company has been focusing on obtaining relevant environmental permitting, compliance with Brazilian legislation, and implementing required policies, structures, and controls. Over the last month, all major contractors were at Amapa to review and analyse their respective engineering areas.
Cadence recently delivered a comprehensive update on Amapa and its other main project, Czech-based European Metals Holdings (hard rock lithium). As discussed in that update, upside in hard rock lithium has been a major source of revenue and growth for the miner.
Cadence also recently announced the sale of its 30% interest in Yangibana Rare Earths Project tenements to Hastings Technology Metals for equity in Hastings valued at £5.1m.
Follow News & Updates from Cadence: