All monetary amounts are expressed in Canadian
Dollars, unless otherwise indicated.
TORONTO and FUJIAN, China, Oct. 8,
2021 /CNW/ - Zijin Mining Group Co., Ltd. ("Zijin")
(SSE: 601899) (SEHK: 2899) and Neo Lithium Corp. ("Neo
Lithium" or the "Company") (TSXV: NLC) (OTCQX: NTTHF)
(FSE: NE2) are pleased to announce that they have entered into a
definitive agreement (the "Arrangement Agreement"), pursuant
to which Zijin has agreed to acquire all of the outstanding shares
of Neo Lithium (the "Transaction") at a price of
C$6.50 per share (the "Offer
Price") in cash. The Offer Price represents a premium of
approximately 36% over Neo Lithium's 20-day volume-weighted average
price ("VWAP") as at October 8,
2021 on the TSX Venture Exchange ("TSXV"). The total
cash consideration for all of the outstanding equity of Neo Lithium
is approximately C$960 million.
Waldo A. Perez, President and
Chief Executive Officer of Neo Lithium, stated:
"After a thorough strategic process, we are very pleased to
provide this all-cash premium offer to our shareholders from a
leading global mining company. This is the result of the collective
work of our premier lithium brine exploration team, starting from
initial discovery in late 2015 to defining one of the largest and
highest-grade lithium brine deposits in the world, and culminating
in this premium offer in just six years. We believe that it is now
time for our project to proceed to the construction and production
phases with Zijin, a leader with a track record of developing
assets in a responsible manner respecting the interests of local
employees, communities and authorities."
Chen Jinghe, Chairman of Zijin, stated:
"Neo Lithium's 3Q lithium brine project in Catamarca,
Argentina is one of the largest
and highest-grade projects of its kind in the world. We would like
to express our high respect for the management and professional
team who discovered and successfully explored this project. The 3Q
project represents an important addition to Zijin's growing global
asset mix and it is a good choice for Zijin to enter the field of
new energy minerals. Thanks to the professional team's efforts and
input in the early stage of the project, we are confident that
together with Zijin's strong financial resources and mining
know-how, we will develop this excellent asset into one of the
world's leading lithium carbonate producing mines. In accordance
with Zijin's co-development aspirations, we will continue to work
closely with local communities and government authorities so that
all relevant stakeholders can benefit from the project's successful
development".
Zijin is committed to retaining the current management and
professional team at LIEX S.A., Neo Lithium's local operating
subsidiary, as well as making contributions to economic and social
developments for Catamarca province, Argentina, as it moves forward to advance the
development of the 3Q project.
Benefits to Neo Lithium Shareholders
- Immediate and significant premium of approximately 36% to the
20-day VWAP on the TSXV
- All-cash offer that is not subject to a financing
condition
- Strong deal certainty with a highly credible and leading global
mining company as purchaser
- Voting support agreements entered into with all directors and
senior officers of Neo Lithium who hold shares
- Removes future dilution, commodity, construction, production
and execution risk with next phase of 3Q project
Transaction Summary
The Transaction will be completed pursuant to a Plan of
Arrangement under the Business Corporations Act
(Ontario). The Transaction will be
subject to the approval of at least 66-⅔% of the votes cast by
shareholders. In addition to shareholder approval, the Transaction
is also subject to the receipt of certain government, regulatory,
court and stock exchange approvals, including approval by relevant
authorities in the People's Republic of
China and Investment Canada Act approval, and other closing
conditions customary in transactions of this nature.
The Arrangement Agreement includes, among other things, a
customary non-solicitation covenant on the part of Neo Lithium
(including fiduciary out provisions) and a right for Zijin to match
any competing offer that constitutes a superior proposal. Under
certain circumstances, Zijin would be entitled to a US$35 million termination fee and Neo Lithium
would be entitled to a US$35 million
reverse termination fee.
Neo Lithium Board of Directors Recommendations
The Transaction has been unanimously approved by the board of
directors of Neo Lithium following the unanimous recommendation of
a special committee of independent directors of Neo Lithium (the
"Special Committee"). Cormark Securities has provided an
opinion to the board of directors of Neo Lithium and to the Special
Committee, stating that, based upon and subject to the assumptions,
limitations and qualifications set forth therein, the consideration
offered to the Neo Lithium shareholders pursuant to the Transaction
is fair, from a financial point of view, to the Neo Lithium
shareholders. The Cormark Securities fairness opinion was provided
on a fixed fee basis and is not contingent on the outcome of the
Transaction.
Timing
Full details of the Transaction will be included in Neo
Lithium's management information circular, which is expected to be
mailed to shareholders in November
2021 with the shareholders meeting expected to take place in
December 2021. Shareholders are urged
to read the information circular once available as it will contain
additional important information concerning the Transaction. The
Arrangement Agreement will also be filed on SEDAR. The Transaction
is expected to close in the first half of 2022.
Advisors and Counsel
Paradigm Capital is acting as financial advisor to Zijin and
Torys LLP is acting as Zijin's legal counsel.
BofA Securities is acting as financial advisor to Neo Lithium.
Cormark Securities provided an independent fairness opinion to the
Neo Lithium board of directors and the Special Committee. Fasken
Martineau DuMoulin LLP is acting as legal counsel to Neo Lithium
and the Special Committee.
About Neo Lithium Corp.
Neo Lithium Corp. has quickly become a prominent name in lithium
brine development by virtue of its high quality 3Q project and
experienced team. Neo Lithium is rapidly advancing its 100% owned
3Q project - a unique high-grade lithium brine lake and salar
complex in Latin America's
"Lithium Triangle".
The 3Q project is located in Catamarca Province, the largest
lithium producing area in Argentina covering approximately 35,000 ha
including a salar complex of approximately 16,000 ha.
Additional information regarding Neo Lithium Corp. is available
on SEDAR at www.sedar.com under the Company's profile and at its
website at www.neolithium.ca, including various pictures of ongoing
work at the project.
About Zijin
Formed in 1993 and based in Fujian,
China, Zijin is one of the largest mining
companies in China as well as a
leading global gold and copper producer. It manages an extensive
portfolio, primarily consisting of gold, copper, zinc, and other
metals through investments in China and twelve overseas
countries across Europe,
Central Asia, Africa, Oceania and South America. Listed on the Shanghai Stock
Exchange and the Hong Kong Stock Exchange, Zijin has a market
capitalization of approximately US$40
billion.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
Cautionary Statements Regarding Forward-Looking
Statements
Forward-Looking Statements -- Certain information set forth
in this news release may contain forward-looking statements. Such
statements include but are not limited to, statements as to the
benefits of the Transaction to the Company's shareholders, the
anticipated meeting date and mailing of the information circular in
respect of the meeting, timing for completion of the Transaction
and receiving the required regulatory and court approvals,
expectations regarding how Zijin will continue operations and
benefit the region, advancing the 3Q project, the economic effect
of the 3Q project, and future plans and objectives of the Company
and Zijin. Generally, forward-looking statements can be identified
by the use of words such as "plans", "expects" or "is expected",
"scheduled", "estimates" "intends", "anticipates", "believes", or
variations of such words and phrases, or statements that certain
actions, events or results "can", "may", "could", "would",
"should", "might" or "will", occur or be achieved, or the negative
connotations thereof. These forward-looking statements are subject
to numerous risks and uncertainties, certain of which are beyond
the control of the Company, which could cause the actual results,
performance or achievements of the Company and/or Zijin to be
materially different from the future results, performance or
achievements expressed or implied by such statements. These risks
include, without limitation, risks related to obtaining regulatory
and court approvals for the Transaction, political and regulatory
risks associated with mining and exploration activities, including
environmental regulation, risks and uncertainties relating to the
interpretation of drill and sample results, risks related to the
uncertainty of cost and time estimation and the potential for
unexpected delays, costs and expenses, risks related to metal price
fluctuations, the market for lithium products, and other risks and
uncertainties related to the Company's prospects, properties and
business detailed elsewhere in the Company's disclosure record.
Although the Company believes its expectations are based upon
reasonable assumptions and has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events
or results not to be as anticipated, estimated or intended and
undue reliance should not be placed on forward-looking
statements.
SOURCE Neo Lithium Corp.
