Lithium Power International Ltd (ASX:LPI) has divested its Centenario Salar asset in Argentina after completing a share purchase agreement with Canadian-based company Vertex Lithium Corporation to acquire LPI’s 70% stake in lithium exploration properties at the project.
Centenario has been part of LPI’s asset portfolio since conception, contributing to the company’s successful IPO in June 2016.
Divesting the asset will release the company from future annual exploration spending obligations set under Argentinean regulations.
Given that LPI’s focus in South America is on its flagship Maricunga lithium brine project in Chile, the Vertex transaction will also remove the cost of holding an asset in a foreign jurisdiction that the company has no plans to explore further, allowing it to concentrate on Maricunga.
Providing immediate value
“This completion of the transaction with Vertex provides LPI with an immediate value for our holding in Centenario, a project which the company assessed, in 2018-19, to have little medium-term developmental potential," Lithium Power International CEO Cristobal Garcia-Huidobro said.
“The finalisation of this transaction allows LPI to focus on the development of our flagship Maricunga lithium brine project in Chile, with its revised DFS (definitive feasibility study) due to be released shortly.
“The release of value from Centenario is a more effective means of deploying the company’s capital, as we advance our expansion and exploration strategy in Western Australia.
“The company remains committed to the strategy of being a diversified lithium explorer and developer, with projects now focused in Chile and Australia.”
The share purchase agreement was executed in May 2021, with a six-month deferred settlement, the basic details of the now completed transaction being:
- A cash payment of US$700,000 for LPI’s 70% shareholding in the holding company, Lithium Power International Holdings (Argentina) Pty Ltd;
- US$40,000 to cover the costs to execute the transaction; and
- LPI has opted for the C$250,000 worth of fully paid ordinary shares in Vertex to be paid in cash, due to the delay in the IPO of Vertex on the TXS. Therefore, US$200,000 has been received in lieu of shares.
About Lithium Power International
Lithium Power International is a pure-play lithium company focused on the development of Chile’s next high-grade lithium mine.
The Maricunga JV, in which LPI holds a 51% interest, is the highest quality pre-production lithium brine project in South America.