Neo Lithium Corp (CVE:NLC) (OCTMKTS:NTTHF) (FRA:NE2) announced an C$8.5 million investment from a Chinese manufacturer of lithium-ion batteries for electric vehicles (EVs) as the junior continues to advance its 3Q project in Argentina - a high-grade lithium brine lake and salar complex in the 'Lithium Triangle'.
A subsidiary of Chinese group Contemporary Amperex Technology (CATL) will subscribe for over 10.2 million shares in a placing at C$0.84 each for gross proceeds of C$8,582,702, said Neo Lithium. It gives CATL an 8% stake in the lithium miner.
The investment will strengthen Neo Lithium's finances and move it a step closer to the development and construction of the 3Q project, the firm said in a statement.
"The company completed a positive pre-feasibility study in May 2019 and going forward, the company together with the technical assistance of CATL, will finish the definitive feasibility study (DFS) in order to define the precise financing requirements for the 3Q project," it added.
"The DFS will evaluate the economic feasibility for a project with a nameplate production capacity of approximately 20,000 metric tons of battery quality lithium carbonate, with expansion capacity up to 40,000 metric tons per year of battery quality lithium carbonate."
Headquartered in Ningde, China, as of last year, CATL has more than 26,000 employees around the world. It is a global leader in the development and manufacturing of lithium-ion batteries and its activity covers R&D, manufacturing and sales in battery systems for new energy vehicles and energy storage systems.
"As we have said many times, we believe it's extremely important to have a strategic partner with unique knowledge of the expected end-market demand, before concluding the DFS. We are confident that CATL will help us define the battery-grade quality and certification of the final product to highest levels," said Neo Lithium CEO Waldo Perez.
The CATL investment means Neo Lithium's balance sheet now stands at more than C$37 million of cash.
CATL will be entitled to nominate one non-executive director to Neo Lithium's board, while it holds at least 8% of equity. It also the right to participate in future equity offerings in order to maintain its ownership.
The Chinese group will also have the right to nominate one person to the Technical Committee, to help oversee the preparation of the final DFS to be submitted to the board.
Shares rocketed up 31% on Monday in Toronto, at C$0.76 each.
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