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Piedmont Lithium Sells Portion of Atlantic Shares to Assore
Rhea-AI Impact
(Moderate)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
Piedmont Lithium (PLL) has announced the sale of 24.3 million shares of Atlantic Lithium to Assore International Holdings for GBP0.25 per share, resulting in approximately US$7.8 million in proceeds. This represents a premium to the prevailing market price and will result in Assore owning approximately 28.4% of Atlantic. Piedmont will retain 32.7 million Atlantic shares, representing approximately 5.2% ownership in Atlantic. This sale has no impact on Piedmont's joint venture, earn-in, or offtake position with Atlantic or the Ewoyaa project. The company finished 2023 with approximately US$72 million in cash and US$47.4 million in marketable securities as of January 17, 2023.
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Insights
The sale of a 3.9% stake in Atlantic Lithium by Piedmont Lithium to Assore International Holdings is a strategic financial maneuver that is likely to have a positive impact on Piedmont's liquidity position. The transaction, which is being carried out at a premium to the market price, indicates a strong demand for Atlantic Lithium's shares and suggests confidence in the underlying value of the company. This move could be interpreted by the market as a sign of Piedmont's financial prudence, as it unlocks capital while maintaining a significant stake in Atlantic Lithium.
From a financial perspective, the inflow of approximately US$7.8 million in proceeds will bolster Piedmont's cash balance, which is already robust with US$72 million in cash and US$47.4 million in marketable securities. This liquidity is crucial for Piedmont's ongoing operations and future investments, especially in the capital-intensive lithium mining sector which is central to the electric vehicle supply chain. The transaction does not affect Piedmont's operational agreements with Atlantic, preserving the strategic joint venture, earn-in and offtake positions, which are critical for securing lithium supply. Investors should monitor how Piedmont plans to allocate the additional capital towards its growth initiatives or debt reduction.
The sale of shares by Piedmont Lithium reflects broader trends in the electric vehicle (EV) supply chain industry, where companies are increasingly looking to solidify their financial positions amidst growing demand for lithium. The premium price paid by Assore International Holdings underscores the bullish outlook for lithium resources and the strategic importance of the Ewoyaa project. It also reinforces the notion that stakeholders are willing to invest in quality assets with long-term growth potential.
For stakeholders in the lithium market, this sale is indicative of the industry's consolidation, with larger shareholders like Assore increasing their positions in promising projects. This could signal a potential increase in mergers and acquisitions activity within the sector as companies seek to streamline operations and secure critical mineral resources. The fact that Piedmont retains a 5.2% ownership stake in Atlantic Lithium suggests an ongoing interest in the project's success, which could have implications for future collaboration and influence over the project's direction.
The transaction between Piedmont Lithium and Assore International Holdings should be viewed within the context of the global lithium market and its implications for the U.S. EV supply chain. Lithium is a critical component in the production of electric vehicle batteries and the U.S. has been actively looking to secure domestic and allied sources of this commodity to reduce dependence on foreign supply chains, particularly those dominated by China. Piedmont's strategic sale of shares at a premium could reflect an anticipation of increasing lithium prices due to the projected growth in EV demand and potential supply constraints.
In the long-term, the sale may have implications for the global competitiveness of the U.S. EV industry. By ensuring capital availability for Piedmont, the company is better positioned to invest in the extraction and processing of lithium domestically, which is aligned with federal objectives to bolster the U.S. supply chain. The sale's timing and terms may also be indicative of a maturing market where asset liquidity and strategic partnerships become key drivers of growth and stability, particularly in industries subject to geopolitical and market volatility.
BELMONT, N.C.--(BUSINESS WIRE)--
Piedmont Lithium (“Piedmont” or the “Company”) (Nasdaq: PLL; ASX: PLL), a leading global supplier of lithium resources critical to the U.S. electric vehicle supply chain, today announced an agreement to sell a portion of shares it holds in Atlantic Lithium (“Atlantic”) (AIM: ALL; ASX: A11) to Atlantic’s largest shareholder, Assore International Holdings (“Assore”).
The Company has agreed to sell 24.3 million shares of Atlantic for GBP0.25 per share, representing a premium to the prevailing market price. The shares to be sold represent approximately 3.9% of Atlantic’s outstanding shares and will result in approximately US$7.8 million in proceeds for Piedmont. Following the transaction, Assore will own approximately 28.4% of Atlantic. Piedmont will retain 32.7 million Atlantic shares, representing approximately 5.2% ownership in Atlantic. The sale of these shares has no impact on Piedmont’s joint venture, earn-in, or offtake position with Atlantic or the Ewoyaa project.
“We finished 2023 in a strong position with approximately US$72 million in cash and US$47.4 million in marketable securities as of market close on January 17. We have always viewed our Atlantic shares as a potential source of capital and are pleased to further bolster our cash balance through this agreement,” said Keith Phillips, President and CEO of Piedmont Lithium. “We remain confident about the potential of Ewoyaa as a logistically advantaged, low-cost producer of spodumene concentrate, but are taking a disciplined approach to deploying capital in the current lithium price environment and positioning ourselves for the recovery we anticipate in the lithium market.”
About Piedmont Lithium
Piedmont Lithium Inc. (Nasdaq: PLL; ASX: PLL) is developing a world-class, multi-asset, integrated lithium business focused on enabling the transition to a net zero world and the creation of a clean energy economy in North America. Our goal is to become one of the largest lithium hydroxide producers in North America by processing spodumene concentrate produced from assets where we hold an economic interest. Our projects include our Carolina Lithium and Tennessee Lithium projects in the United States and partnerships in Quebec with Sayona Mining (ASX: SYA) and in Ghana with Atlantic Lithium (AIM: ALL; ASX: A11). These geographically diversified operations will enable us to play a pivotal role in supporting America’s move toward energy independence and the electrification of transportation and energy storage. For more information, follow us on Twitter @PiedmontLithium and visit www.piedmontlithium.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of or as described in securities legislation in the United States and Australia, including statements regarding exploration, development construction and production activities of Sayona Mining, Atlantic Lithium and Piedmont; current plans for Piedmont’s mineral and chemical processing projects; Piedmont’s potential acquisition of an ownership interest in Ewoyaa; and strategy. Such forward-looking statements involve substantial and known and unknown risks, uncertainties, and other risk factors, many of which are beyond our control, and which may cause actual timing of events, results, performance or achievements and other factors to be materially different from the future timing of events, results, performance, or achievements expressed or implied by the forward-looking statements. Such risk factors include, among others: (i) that Piedmont, Sayona Mining or Atlantic Lithium may be unable to commercially extract mineral deposits, (ii) that Piedmont’s, Sayona Mining’s or Atlantic Lithium’s properties may not contain expected reserves, (iii) risks and hazards inherent in the mining business (including risks inherent in exploring, developing, constructing and operating mining projects, environmental hazards, industrial accidents, weather or geologically related conditions), (iv) uncertainty about Piedmont’s ability to obtain required capital to execute its business plan, (v) Piedmont’s ability to hire and retain required personnel, (vi) changes in the market prices of lithium and lithium products, (vii) changes in technology or the development of substitute products, (viii) the uncertainties inherent in exploratory, developmental and production activities, including risks relating to permitting, zoning and regulatory delays related to our projects as well as the projects of our partners in Quebec and Ghana, (ix) uncertainties inherent in the estimation of lithium resources, (x) risks related to competition, (xi) risks related to the information, data and projections related to Sayona Mining or Atlantic Lithium, (xii) occurrences and outcomes of claims, litigation and regulatory actions, investigations and proceedings, (xiii) risks regarding our ability to achieve profitability, enter into and deliver product under supply agreements on favorable terms, our ability to obtain sufficient financing to develop and construct our projects, our ability to comply with governmental regulations and our ability to obtain necessary permits, and (xiv) other uncertainties and risk factors set out in filings made from time to time with the U.S. Securities and Exchange Commission (“SEC”) and the Australian Securities Exchange, including Piedmont’s most recent filings with the SEC. The forward-looking statements, projections and estimates are given only as of the date of this press release and actual events, results, performance, and achievements could vary significantly from the forward-looking statements, projections and estimates presented in this press release. Readers are cautioned not to put undue reliance on forward-looking statements. Piedmont disclaims any intent or obligation to update publicly such forward-looking statements, projections, and estimates, whether as a result of new information, future events or otherwise. Additionally, Piedmont, except as required by applicable law, undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Piedmont, its financial or operating results or its securities.
