TSX Venture Exchange (TSX-V): LIT
Frankfurt Stock Exchange (FSE): OAY3
OTCQB Venture Market (OTC): PNXLF
VANCOUVER, BC, Sept. 27,
2023 /CNW/ - Argentina Lithium & Energy
Corp. (TSXV: LIT) (FSE: OAY3) (OTC: PNXLF), ("Argentina
Lithium" or the "Company") is pleased to announce that it has
entered into a definitive agreement (the "Investment
Agreement") on September 26,
2023, for the ARS$ equivalent of a US$90 million1 investment in
Argentina Litio y Energia S.A.
("ALE"), by Stellantis (defined below) (the "Transaction"),
one of the world's leading automakers and mobility providers with
iconic brands including Abarth, Alfa Romeo, Chrysler, Citroën,
Dodge, DS Automobiles, Fiat, Jeep®, Lancia, Maserati,
Opel, Peugeot, RAM, Vauxhall,
Free2Move and Leasys.
Pursuant to the Transaction, Peugeot Citroen Argentina S.A., a
subsidiary of Stellantis N.V. ("Stellantis"), has agreed to
invest the ARS$ equivalent of US$90
million1 in Argentina to acquire shares of ALE (the
"ALE Shares"). Further, the Company has granted Stellantis
the Exchange Right (as defined below) to exchange all of the ALE
Shares for up to 19.9% of the outstanding common shares of
Argentina Lithium (on an undiluted basis) ("Common Shares")
in the future, subject to certain conditions. The proceeds of the
Transaction will be used to advance development of the Company's
lithium projects held through its wholly owned subsidiary in
Argentina, and for general
corporate purposes.
As a result of the Transaction, Stellantis will own 19.9% of the
issued and outstanding ALE Shares and Argentina Lithium will own
80.1%.
Argentina Lithium President & Chief Executive Officer
Nikolaos Cacos said: "We are
delighted to have Stellantis as a partner in the future development
of our lithium projects in Argentina. Together, we share a vision to
build a sustainable lithium mining operation for the future. We
look forward to a strong and successful relationship with
Stellantis and we are committed to delivering a sustainable lithium
product that will contribute to the electrification of
transportation and the protection of our atmosphere."
At closing of the Transaction, Argentina Lithium and Stellantis
will enter into an exchange agreement (the "Exchange
Agreement"). Under the Exchange Agreement, Argentina Lithium
will grant Stellantis an irrevocable right (the "Exchange
Right") to exchange all of the ALE Shares then held by
Stellantis for such number of Common Shares equaling 24.844% of (i)
the outstanding Common Shares (on an undiluted basis) as of the
date of the Exchange Agreement and (ii) Common Shares issued by
Argentina Lithium (between the date of the Exchange Agreement and
the date Stellantis exercises the Exchange Right) upon the exercise
of warrants, stock options or other securities convertible or
exchangeable into Common Shares existing as of the date of the
Exchange Agreement (together, the "Exchange Shares"),
subject to certain exchange conditions. Following the issuance of
Exchange Shares, Stellantis will own at most 19.9% of the Common
Shares (on an undiluted basis). In addition, Argentina Lithium will
grant Stellantis an irrevocable right (the "Top-Up Right")
to subscribe for additional Common Shares (the "Additional
Shares") if necessary for Stellantis to achieve a 19.9%
interest in the Common Shares (on an undiluted basis). Any
Additional Shares Stellantis elects to purchase pursuant to the
Top-Up Right will be issued at the maximum discounted market price
permitted under the rules and policies of the TSXV, unless the
Top-Up Right is exercised after an acquisition of Argentina
Lithium, in which case the subscription price under the Top-Up
Right will be the pre-announcement market price of shares of
Argentina Lithium. Any issuance of Additional Shares will be
subject to the prior approval of the TSXV. Stellantis will not have
the right under the Exchange Right and the Top-Up Right to acquire
more than 19.9% of the outstanding Common Shares following the
issuance of Exchange Shares and Additional Shares, if any. The
Exchange Agreement also provides Stellantis with observer rights to
attend board meetings of Argentina Lithium for as long as
Stellantis owns at least 10% of the issued and outstanding ALE
Shares. As of the date hereof, the Company has 130,065,319 Common
Shares, 11,341,000 stock options and 71,836,067 warrants issued and
outstanding. Accordingly, subject to any adjustments under the
Exchange Agreement, the maximum number of "Exchange Shares" that
will be issued to Stellantis as consideration for its indirect
investment in Argentina Lithium
will be 53,011,137 Common Shares.
Argentina Lithium and Stellantis will enter into a Lithium
Offtake Agreement (the "Offtake Agreement"). Under the
Offtake Agreement, ALE has agreed to sell to Stellantis, and
Stellantis has agreed to purchase from ALE up to 15,000 tonnes per
annum of lithium produced by ALE over a seven-year period (the
"Supply Obligation") subject to the terms and conditions set
out in the Offtake Agreement. After the initial seven-year term,
the Offtake Agreement may be extended by mutual agreement for an
additional number of years. The price of lithium products sold by
ALE under the Offtake Agreement will be based on an agreed
market-based price formula at the time of each shipment. The
commencement of the Supply Obligation of ALE is conditional on the
successful start of commercial production at one or more of its
projects. The Offtake Agreement also contains certain product
qualification, certification and reporting requirements and
provides Stellantis with a right to acquire any production prior to
the commencement of the Supply Obligation and a right of first
refusal on the sale to third parties of any lithium products (in
excess of the Supply Obligation) after the commencement of
commercial production.
Argentina Lithium, ALE and Stellantis will enter into a
Shareholders' Agreement (the "Shareholders' Agreement")
relating to ALE and Stellantis' ownership of ALE Shares and
provides for the following principal terms:
- right of Stellantis to nominate one director to the board of
directors of ALE ("Stellantis Director") for as long as
Stellantis has an ownership position of not less than 10% of the
issued and outstanding ALE Shares;
- certain corporate decisions of ALE may not be undertaken
without the affirmative vote the Stellantis Director or the
approval by shareholders holding more than 90% of the issued and
outstanding ALE Shares;
- right of each shareholder to maintain its ownership percentage
in any equity offerings by ALE;
- transfer restrictions including, rights of first refusal,
drag-along and tag-along rights;
- right of first offer for Stellantis to provide project
financing and any other borrowing by ALE; and
- other terms and conditions consistent with a transaction of
this nature.
In addition, upon exercise of the Exchange Right, Argentina
Lithium will enter into an Investor Rights Agreement with
Stellantis (the "Stellantis IRA"). The Stellantis IRA
provides for the following principal terms in favour of
Stellantis:
- a right to nominate one director to the board of directors of
Argentina Lithium for as long as Stellantis has an ownership
position of not less than 10% of the issued and outstanding Common
Shares;
- pre-emptive right to maintain ownership percentage in certain
follow-on issuances of Common Shares or securities convertible into
Common Shares; and
- other terms and conditions consistent with a transaction of
this nature.
Transaction Conditions and
Timing
Closing of the Transaction is subject to Argentina Lithium
obtaining TSXV approval, ALE completing certain corporate actions
relating to the Transaction and other closing conditions set out in
the Investment Agreement.
The Transaction is anticipated to close on or about October 4, 2023.
Advisors and Fairness
Opinions
PI Financial Corp. is acting as financial advisor to Argentina
Lithium in connection with the Transaction. The Board of Directors
of Argentina Lithium has received a fairness opinion from PI
Financial Corp, stating that, as of the date of such opinion, and
based upon and subject to the assumptions, limitations and
qualifications stated in such opinion, the consideration to be
received by the Company pursuant to the Transaction is fair, from a
financial point of view, to Argentina Lithium shareholders. Blakes,
Cassels & Graydon LLP acted as Canadian legal counsel and
Alfaro-Abogados SC acted as Argentinian legal counsel to Argentina
Lithium in connection with the Transaction.
About Stellantis
Stellantis N.V. (NYSE: STLA / Euronext Milan: STLAM /
Euronext Paris: STLAP) is one of the world's leading automakers and
a mobility provider. Its storied and iconic brands embody the
passion of their visionary founders and today's customers in their
innovative products and services, including Abarth, Alfa Romeo,
Chrysler, Citroën, Dodge, DS Automobiles, Fiat, Jeep®,
Lancia, Maserati, Opel, Peugeot, RAM, Vauxhall, Free2Move and Leasys. Powered by
their diversity, Stellantis leads the way the world moves –
aspiring to become the greatest sustainable mobility tech company,
not the biggest, while creating added value for all stakeholders as
well as the communities in which it operates. For more information,
visit www.stellantis.com.
About Argentina Lithium
Argentina Lithium & Energy Corp is focused on acquiring high
quality lithium projects in Argentina and advancing them toward production
in order to meet the growing global demand from the battery sector.
The management group has a long history of success in the resource
sector of Argentina and has
assembled a first-rate team of experts to acquire and advance the
best lithium properties in the "Lithium Triangle". The Company is a
member of the Grosso Group, a resource management group that has
pioneered exploration in Argentina
since 1993.
ON BEHALF OF THE BOARD
"Nikolaos Cacos"
_______________________________
Nikolaos Cacos, President, CEO and
Director
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
This news release may contain forward-looking statements.
Forward-looking statements address future events and conditions and
therefore involve inherent risks and uncertainties. All statements,
other than statements of historical fact, that address activities,
events or developments the Company believes, expects or anticipates
will or may occur in the future, including, without limitation, the
Transaction; the use of proceeds; the strengths, characteristics
and potential of the Transaction; Argentina Lithium's plans for,
and the future prospects of, its mineral properties; entering into
the Exchange Agreement; the exercise of the Exchange Right or the
Top-Up Right by Stellantis; entering into the Offtake Agreement;
production of lithium products and the successful start of
commercial production at Argentina Lithium's mineral properties;
entering into the Shareholders' Agreement and the Stellantis IRA;
consummation and timing of the Transaction; and satisfaction of the
conditions precedents are forward-looking statements.
Forward-looking statements are subject to a number of risks
and uncertainties that may cause the actual results of the Company
to differ materially from those discussed in the forward-looking
statements and, even if such actual results are realized or
substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on, the Company.
Factors that could cause actual results or events to differ
materially from current expectations include, among other things:
failure to receive TSXV approval; failure to satisfy the condition
precedents, the potential that the Transaction could be terminated
under certain circumstances; the impact of COVID-19; risks and
uncertainties related to the ability to obtain, amend, or maintain
licenses, permits, or surface rights; risks associated with
technical difficulties in connection with mining activities; and
the possibility that future exploration, development or mining
results will not be consistent with the Company's expectations.
Actual results may differ materially from those currently
anticipated in such statements. Readers are encouraged to refer to
the Company's public disclosure documents for a more detailed
discussion of factors that may impact expected future results. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements, unless required pursuant to applicable
laws. We advise U.S. investors that the SEC's mining guidelines
strictly prohibit information of this type in documents filed with
the SEC. U.S. investors are cautioned that mineral deposits on
adjacent properties are not indicative of mineral deposits on our
properties.
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1 As per the
official exchange rate of Argentina Central Bank
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SOURCE Argentina Lithium & Energy Corp.