Argentina Lithium jumps on US$90 million investment by automaker Stellantis
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(Kitco News) - Shares of lithium explorer and developer Argentina Lithium & Energy (TSX-V: LIT) (OTC: PNXLF) soared today after the company announced a US$90 million investment by automaker Stellantis.
According to the company, pursuant to the transaction, Peugeot Citroen Argentina S.A., a subsidiary of Stellantis N.V., has agreed to invest the ARS$ equivalent of US$90 million in Argentina to acquire shares of Argentina Litio y Energia S.A. (ALE).
Further, the company said it has granted Stellantis the exchange right to exchange all of the ALE shares for up to 19.9% of the outstanding common shares of Argentina Lithium (on an undiluted basis) in the future, subject to certain conditions.
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 said that 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.
Importantly, according to the press release, Argentina Lithium and Stellantis will also enter into a lithium offtake agreement, pursuant to which ALE has agreed to sell to Stellantis up to 15,000 tonnes per annum of lithium produced by ALE over a seven-year period.
The company said that after the initial seven-year term, the offtake agreement may be extended by mutual agreement for an additional number of years, adding that 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.
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.
Stellantis N.V. (NYSE: STLA) is one of the world's leading automakers and a mobility provider.
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