Mineral Resources Ltd (ASX:MIN), led by billionaire Chris Ellison, has acquired a 19.8% stake in West Australian explorer Wildcat Resources for $158.7 million.
The acquisition followed discussions led by MinRes chairman James McClements, who traded the shares through his private equity firm, Resource Capital Funds (RCF), and the RCF-controlled Global Advanced Metals.
The transaction catapults MinRes into a promising lithium terrain near its joint Wodgina lithium mine, co-owned with Albemarle.
Back in May, Wildcat was trading with a market capitalisation of $19 million. Since then, speculation around MinRes’ intentions and exploration of its Tabba Tabba lithium project lifted its market value to $900 million.
Wildcat's proximity to established lithium mines makes it an attractive investment. This was demonstrated by New York-listed SQM (NYSE:SQM)'s recent $1.63 billion takeover bid for Azure Minerals — a bid that is complicated by Gina Rinehart's 18% stake in Azure.
The interest in Azure is part of a lithium land grab around established mines in Western Australia that shows no sign of slowing despite the slump in prices for the battery ingredient.
Wildcat chairman Jeff Elliott said: “The acquisition by Mineral Resources of this substantial shareholding provides independent validation of the potential of our Tabba Tabba Lithium Project and the ability to transform it into a tier-one lithium asset.”
MinRes had previously acquired Wodgina from Global Advanced in 2016 for an undisclosed sum before selling half of the asset to Albemarle for about $1.6 billion in 2018. Global Advanced retains tantalum rights at multiple locations, including Wodgina, further solidifying its influence in the lithium and tantalum sectors in Western Australia.