Lithium companies have been active in M&A lately, and more may follow after the proposed deal between Galaxy Resources and Orocobre.
Australia’s Orocobre (TSX:ORL,ASX:ORE) and Galaxy Resources (ASX:GXY,OTC Pink:GALXF) agreed this week to join forces in a AU$4 billion “merger of equals.” The deal comes as demand for lithium for electric vehicle (EV) batteries continues to pick up pace.
Once the merger is complete, the new company will become a top five lithium chemicals company globally and top three outside of China with production capacity of around 40,000 tonnes of lithium carbonate equivalent per year.
Tietto Minerals delivers yet another round of multiple shallow high-grade gold intercepts from Abujar
The latest results were highlighted by 17 metres at 2.84 g/t from 21 metres, including 9 metres at 4.55 g/t. The company is moving towards Abujar being West Africa’s next gold mine.
Tietto Minerals Ltd (ASX:TIE) has returned multiple shallow high-grade intercepts from infill drilling at its flagship Abujar Gold Project, further strengthening the 3.2-million-ounce project’s golden potential.
The latest results, from the Abujar‐Pischon‐Golikro (APG) deposit, include intercepts of:
17 metres at 2.84 g/t gold from 21 metres including 9 metres at 4.55 g/t;
2 metres at 22.7 g/t from 91 metres;
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Acceleration of new lithium projects looks set to be the biggest outcome of a $4 billion merger between Orocobre and Galaxy Resources, with the man who will lead the merged entity declaring it will be âfull speed aheadâ on a long list of growth projects.
Orocobre and Galaxy currently have one lithium production asset each, but the merged entity could have four in the medium term, a new downstream processing plant plus a raft of brownfield expansion options.
The sequencing of those growth projects looms as a major decision for Orocobre chief executive Martin Perez De Solay, but on Monday he indicated projects were more likely to be accelerated rather than delayed once the merger was formalised.
“It’s overwhelmingly positive. On a high level, you have got significant synergies with both businesses having an Argentina base,” said analyst Reg Spencer of broker Canaccord Genuity.
Shares of both companies hit more than three year highs in early trade, with Orocobre gaining about 6% to A$6.56 and Galaxy rising 4% to A$3.75.
Both companies have significant expansion plans, putting the merged company on track to produce more than 130,000 tonnes of lithium carbonate equivalent (LCE), up from around 40,000 tonnes now, with operational synergies and global diversity to make it a major global player, Spencer added.
Orocobre and Galaxy, which operate the Olaroz and Sal de Vida lithium projects in Argentina, respectively, are looking to consolidate their assets in the country.
MELBOURNE -Australian lithium miner Orocobre Ltd is buying smaller domestic peer Galaxy Resources for $1.4 billion to create the world s fifth most valuable producer of the key raw material for. | April 18, 2021