Energy Exploration Technologies (EnergyX) has made an unsolicited, confidential, conditional, non-binding indicative buyout proposal for the Argentinian lithium assets of Galan Lithium.

The offer includes $50m in cash, and shares in EnergyX, valued at another $50m.

Puerto Rico-based EnergyX's shares are currently not listed on any stock exchange.

Galan Lithium’s Argentinian lithium assets are located in Salar del Hombre Muerto and Candelas.

In addition to the acquisition cost, EnergyX has committed to investing another $50m. This investment is earmarked for the initial commercial phase of lithium production at the Hombre Muerto West project and for maintaining the project assets.

Galan would also receive a 10% gross revenue royalty from commercial production for a decade.

Negotiations between Galan and EnergyX are ongoing, with Galan seeking to secure a confidentiality agreement regarding the proposal. The agreement is pending with EnergyX.

The proposal is subject to various conditions including satisfactory due diligence and the negotiation of definitive, binding transaction documentation.

In a press statement, Galan said: “The proposal remains subject to consideration by Galan’s board, and given the early-stage nature of discussions and its conditionality, there is no certainty a transaction will eventuate.

“Given the proposal contemplates the disposition of Galan’s main undertaking, Galan shareholder approval would be a necessary condition to completion under a binding agreement, if such an agreement were to eventuate.”

EnergyX CEO Teague Egan was cited by Reuters as saying that the company intends to acquire Galan’s assets in Argentina to consolidate acreage amid low prices.

Egan said: “There is no doubt in my mind that lithium demand will continue to grow later this decade.”