Li-Metal Announces Strategic Sale of Lithium Metal Business for US$11,000,000 (~C$15,000,000)

Rhea-AI Summary

Li-Metal Corp. (CSE: LIM) has announced the sale of its lithium metal production business to Arcadium Lithium plc for US$11,000,000 (~C$15,000,000) in cash. The transaction includes:

• All lithium metal production technology, patents, know-how, and physical assets
• A long-term supply agreement for lithium metal to support Li-Metal's anode development
• Arcadium's assumption of operations at Li-Metal's Markham, Ontario pilot facility

This strategic move allows Li-Metal to focus on developing ultra-thin, high energy density anodes for next-generation batteries. As part of the deal, Li-Metal's CTO and co-founder, Maciej Jastrzebski, has stepped down but will continue in a consulting role for anode business development.

Positive

• Sale of lithium metal business for US$11 million in cash, strengthening the company's financial position
• Long-term lithium metal supply agreement secured to support anode development
• Strategic focus shift to high-value anode technology development
• Validation of Li-Metal's lithium metal production technology by a major industry player

Negative

• Divestment of a core business segment may impact future revenue streams
• Loss of key personnel with the departure of the CTO and co-founder from his full-time role

Insights

Financial Analyst

The sale of Li-Metal's lithium metal production business for US$11 million is a significant strategic move. This transaction provides Li-Metal with a substantial cash infusion, strengthening its balance sheet and potentially extending its runway. The long-term supply agreement for lithium metal is crucial, as it secures a key raw material for Li-Metal's anode development business.

However, divesting a core technology raises questions about the company's long-term strategy. While it allows Li-Metal to focus on anode development, it also means losing potential revenue from lithium metal production. Investors should closely monitor how effectively the company deploys this capital to advance its remaining anode business and whether this narrower focus will lead to faster commercialization and profitability.

Battery Technology Expert

The sale of Li-Metal's lithium metal production technology to Arcadium Lithium is a double-edged sword for the battery industry. On one hand, it consolidates lithium metal production capabilities under North America's largest producer, potentially streamlining supply chains and accelerating commercialization. On the other hand, it reduces competition in this critical area of battery materials.

Li-Metal's decision to focus on ultra-thin, high energy density anodes aligns with the industry's push towards next-generation batteries. The success of this strategy will depend on how quickly Li-Metal can bring its anode technology to market and whether it can maintain a competitive edge without in-house lithium metal production. The long-term supply agreement with Arcadium will be important in supporting Li-Metal's anode development efforts.

Market Research Analyst

This transaction reflects the ongoing consolidation in the battery materials sector, as larger players seek to secure critical technologies and supply chains. For Li-Metal, the deal provides immediate capital and allows for a more focused business model. However, it also means the company is now more dependent on external suppliers for a key component.

The market's reaction will likely hinge on Li-Metal's ability to articulate a clear path forward for its anode business. Investors will be watching for concrete milestones in anode development and commercialization. The departure of the CTO and co-founder to Arcadium could be seen as a loss of expertise, potentially impacting investor confidence. Li-Metal must demonstrate that it can continue to innovate and execute without this key figure in its original technology development.

Li-Metal completes all cash transaction for sale of lithium metal technology

Transaction includes long term supply agreement for lithium metal to support anode development

Toronto, Ontario--(Newsfile Corp. - August 2, 2024) - Li-Metal Corp. (CSE: LIM) (OTCQB: LIMFF) (FSE: 5ZO) ("Li-Metal" or the "Company"), a leading developer of lithium metal anode production technologies essential for next-generation batteries, is pleased to announce that it has completed today the sale of certain assets constituting its lithium metal production business (the "Assets") to Arcadium Lithium plc ("Arcadium" or the "Purchaser"). Pursuant to a definitive Asset Purchase Agreement dated August 2, 2024 (the "Agreement"), Li-Metal sold the assets for aggregate cash consideration paid today by the Purchaser of US$11,000,000. The Assets include all of Li-Metal's lithium metal production technology, including all related patents, proprietary know-how, and physical assets utilized in lithium metal production.

Pursuant to the Agreement, Arcadium, amongst other things, will assume operations of Li-Metal's pilot metal production facility located in Markham, Ontario, to continue the commercialization of lithium metal production technology. To support Li-Metal's next generation lithium metal anode commercialization, parties have entered into a supply agreement under which Arcadium will provide lithium metal to Li-Metal as part of a long term off-take agreement.

"The sale of our lithium metal technology to Arcadium, North America's largest established lithium metal producer, represents a pivotal milestone in Li-Metal's journey. This transaction validates the exceptional work of our dedicated team in advancing lithium metal production through our patented carbonate-to-metal process. The capital generated from this sale allows for continued development of our ultra-thin, high energy density anodes for next-generation batteries. This investment will further solidify our commitment to pioneering innovations in battery technology," Keshav Kochhar, CEO, stated.

In addition, and pursuant to the Agreement, Li-Metal's Chief Technology Officer and co-founder, Maciej Jastrzebski, has stepped down form his position and will be working with Arcadium to facilitate the transfer of technology and team. Mr. Jastrzebski will, however, continue in a consulting role with the Company to assist in the continued development of its anode business.

About Li-Metal Corp.

Li-Metal (CSE: LIM) (OTCQB: LIMFF) (FSE: 5ZO) is a leader in the development of advanced anode production technology to support next generation batteries, providing potential for longer range electric vehicles, electric flight and other advanced applications. At Li-Metal's Rochester facility, the Company continues to actively work with automotive and battery manufacturers in the advancement of next generation batteries. Li-Metal supports battery developers' ability to power more cost-effective electric vehicles that go farther and unlock the future of transportation. For more information, visit: https://li-metal.com.

About Arcadium Lithium

Arcadium Lithium (NYSE: ALTM) (ASX: LTM) is a leading global lithium chemicals producer committed to safely and responsibly harnessing the power of lithium to improve people's lives and accelerate the transition to a clean energy future. We collaborate with our customers to drive innovation and power a more sustainable world in which lithium enables exciting possibilities for renewable energy, electric transportation and modern life. Arcadium Lithium is vertically integrated, with industry-leading capabilities across lithium extraction processes, including hard-rock mining, conventional brine extraction and direct lithium extraction (DLE), and in lithium chemicals manufacturing for high performance applications. We have operations around the world, with facilities and projects in Argentina, Australia, Canada, China, Japan, the United Kingdom and the United States.

Forward-Looking Information

This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the Company. Any such forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "plans" and similar expressions. Readers are cautioned not to place undue reliance on forward-looking statements. Statements about, among other things, the Company's strategic plans and the financings are forward-looking information. These statements should not be read as guarantees of future performance or results. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements. Although such statements are based on management's reasonable assumptions, there can be no assurance that the development of the business of the Company will be completed as described above or that the financings will be completed. The Company assumes no responsibility to update or revise forward-looking information to reflect new events or circumstances unless required by applicable law.

Li-Metal Investor Contact: Keshav Kochhar
Telephone: +1 647 494 4887
Email: ir@li-metal.com

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/218728

FAQ

What is the value of Li-Metal's (LIMFF) lithium metal business sale to Arcadium Lithium?

Li-Metal Corp. (LIMFF) sold its lithium metal production business to Arcadium Lithium plc for US$11,000,000 (approximately C$15,000,000) in cash on August 2, 2024.

What assets are included in Li-Metal's (LIMFF) sale to Arcadium Lithium?

The sale includes all of Li-Metal's lithium metal production technology, related patents, proprietary know-how, and physical assets used in lithium metal production. Arcadium will also assume operations of Li-Metal's pilot metal production facility in Markham, Ontario.

How will the sale affect Li-Metal's (LIMFF) future operations?

The sale allows Li-Metal to focus on developing ultra-thin, high energy density anodes for next-generation batteries. The company has secured a long-term supply agreement with Arcadium for lithium metal to support its anode development.

What changes in Li-Metal's (LIMFF) management occurred due to the sale?

Li-Metal's Chief Technology Officer and co-founder, Maciej Jastrzebski, has stepped down from his position but will continue in a consulting role to assist in the development of the company's anode business.