- Lithium producer Orocobre (ORE) has completed its acquisition of Canadian venture company Advantage Lithium
- Through the acquisition, Advantage Lithium shareholders have 0.142 Orocobre shares for every Advantage share held
- With the deal complete, Orocobre can assume full control of the Olaroz Lithium Facility in Argentina, which was previously a joint venture between the two companies
- Despite lowering its lithium price late last year, Orocobre remains confident about the resources’ value in the emerging ion-battery market
- Orocobre is up 3.2 per cent at market open, trading for $2.26 per share
Lithium producer Orocobre Limited (ORE) has completed its acquisition of Canadian venture company Advantage Lithium
The previously announced acquisition was finalised earlier this month, after the Supreme Court of British Columbia approved the sale.
In a share-for-share deal, Advantage Lithium shareholders have now received 0.142 shares in Orocobre, in exchange for their previously held interests.
Before the acquisition, Orocobre was already Advantage Lithium’s largest shareholder, holding around 37 per cent.
Through the deal, Orocobre will acquire full control of the Olaroz facility in Argentina. The project was initially a joint venture between the two companies. By assuming full control, Orocobre hopes to manage the project more directly.
As a result of the newly issued shares, Orocobre has increased its share float by 5.8 per cent.
Orocobre’s Managing Director and CEO, Mr. Martín Pérez de Solay, believes that the acquisition is a strong step for the company.
“I would like to thank Advantage shareholders for their support of this transaction, and welcome them to Orocobre,” Martín said.
“Whilst current global events present some challenges, the fundamentals of the lithium industry into the future remain strong. Advantage shareholders will now be able to participate in this directly,” he continued.
Martín added that the deal represents an unprecedented land package for Orocobre, providing a strong position for future growth.
However, the company was forced to drop its lithium price late last year due to a struggling market. An influx of new lithium producers and a slower-than-expected ramp-up in demand from the ion-battery industry has resulted in an oversupplied market.
On top of that, the recent economic downturn caused by the ongoing COVID-19 pandemic could impact prices further. However, lithium producers like Orocobre remain confident in the resource’s long-term viability.
Orocobre is up 3.2 per cent at market open, trading for $2.26 per share at 10:32 am AEST.