Neo Lithium Corp (CVE:NLC) (OTCQX:NTTHF) (FRA:NE2) has closed the previously-announced C$8.6 million equity investment from China’s Contemporary Amperex Technology Co. Limited (CATL), the world's largest EV battery company.
CATL, through a controlled subsidiary, made the investment via a private placement consisting of 10,217,503 Neo Lithium common shares at a price of C$0.84 per share, which would give the battery manufacturer and technology company an around 8% ownership interest in Neo Lithium.
“The closing of the CATL strategic investment validates the quality of our 3Q project and the capabilities of our management team. It further strengthens our long-term commitment and focus on our project as we work together with CATL to bring 3Q into full development by building a comprehensive financing plan,” said Neo Lithium Chairman Constantine Karayannopoulos in a statement.
READ: Neo Lithium advancing one of the world's best lithium brine projects towards final feasibility
He added: “On behalf of the board, I am delighted and honoured to formally welcome CATL as a new shareholder and we look forward to working with them to advance the 3Q Project into construction and ultimate production.”
Neo Lithium noted that with the proceeds from the CATL equity investment, it now has a “strong” net cash position of about C$35 million.
The company said it plans to use the proceeds to fund a Definitive Feasibility Study on its wholly-owned Tres Quebradas (3Q) Lithium Project in Argentina.
Neo Lithium’s flagship Tres Quebradas (3Q) project lies within the southern end of what is known as the “Lithium Triangle,” covering 35,000 hectares, and is considered one of the top three highest-grade lithium projects in the world and is the seventh-largest brine project on the planet with significant exploration potential.
The project has Proven & Probable reserves of 1.3 million tonnes of lithium carbonate (LCE) with 790 milligrams per litre of lithium. A Pre-Feasibility Study completed in 2019 estimated average annual production from 3Q of 20,000 tonnes of battery-grade LCE, with significant potential to expand with reserves representing only 32% of the entire resource.
The common shares issued to CATL are subject to a four-month statutory hold period expiring on April 15, 2021.
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