Lithium Power International Ltd (ASX:LPI) has begun the process of divesting its Western Australian Greenbushes and Pilgangoora hard rock lithium assets into a subsidiary over the next six months, which will then seek to list on the ASX.
The LPI board believes the demerger will allow the company to capitalise on the WA lithium assets’ potential while also re-focusing the company’s efforts on the continued development of its flagship Maricunga Lithium Brine Project in Chile.
Read: Lithium Power International makes headway at Western Australian lithium assets
“Opportunity to create long term value”
“LPI believes that there is a compelling strategic rationale for the demerger of LPI’s WA hard rock lithium exploration assets,” Lithium Power International CEO Cristobal Garcia-Huidobro said.
“The demerger will offer existing LPI shareholders the opportunity to create long term value via a new, ASX-listed company.
“LPI has a number of highly prospective assets located in WA that are at an exciting stage of exploration.
“They comprise three tenements in the Greenbushes region, immediately along-strike from the Talison mine, and three tenements in the Pilbara region (one of which is adjacent to tenements held by Pilbara Minerals).
“These assets deserve their own time, attention and resources, and LPI’s board believes that it is the best outcome for LPI shareholders to create a dedicated, WA-focused company that has the technical, human and financial resources to advance these exciting assets.
“A capital reduction and in-specie distribution to LPI shareholders will provide a direct level of participation in the WA assets.
“It will also allow LPI to focus solely on the development of its flagship Maricunga Lithium Brine Project in Chile, which is at a much more advanced stage of development.
“We are excited by what the demerger can achieve and look forward to providing further details in the coming weeks and months.”
Lithium Power International’s shareholders will receive shares in the demerged company on a pro rata basis via capital reduction and in-specie distribution, subject to shareholder and regulatory approvals.
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 joint venture, in which LPI holds a 51% interest, is the highest quality pre-production lithium brine project in South America and has one of the world’s highest-grade lithium resources at 1,167 mg/l lithium and 8,500 mg/l potassium.