Mining Technology

Pilbara Minerals acquires Latin Resources to diversify lithium operations

Australian lithium miner Pilbara Minerals is set to acquire 100% of the shares in Latin Resources for around A$559.9m ($369.4m).

Australian lithium mining company Pilbara Minerals announced on Thursday (15 August) that it plans to acquire Latin Resources for approximately A$559.9m to diversify its operations.

Pilbara Minerals has secured Latin Resources' primary Salinas lithium project in Minas Gerais, Brazil. The project has the potential to emerge as one of the world's top ten hard rock lithium-producing operations outside of Africa, Pilbara said. The company added that the project offers development flexibility, contingent upon market conditions, to cater to emerging markets.

Dale Henderson, Pilbara Minerals’ managing director and CEO, said: “The acquisition will deliver our second 100% owned, Tier 1, hard rock lithium asset, expected to be low-cost and accretive for our shareholders. It [allows] Pilbara Minerals... to sequence new supply and diversify into new growth markets for lithium, such as Europe and North America.”

According to the lithium miner, Salinas could immediately increase Pilbara Minerals' mineral resources by around 20%, contributing up to 30% of steady-state production once it achieves competitive production costs.

Latin Resources’ shareholders will receive 0.07 new shares of Pilbara Minerals for each Latin Resources share they own after the swap, and will possess around 6.4% of Pilbara Minerals’ shares.

According to Pilbara Minerals, this swap will provide Latin Resources shareholders with improved market positioning, increased liquidity, better access to capital markets, and inclusion in relevant Australian Securities Exchange (ASX) and global indices.

Latin Resources’ main shareholder, José Luis Manzano (7.9%), intends to vote for the scheme unless a better proposal arises and the independent expert no longer believes the scheme is in Latin Resources shareholders' best interests.

Latin Resources managing director Chris Gale said: “The scheme announced today provides Latin Resources shareholders with an exciting opportunity to become shareholders in the world’s largest pure-play hard rock lithium producer, diversified across Tier 1 projects in Australia and Brazil.”

Additionally, Gale will join Pilbara Minerals as a consultant for 12 months to ensure continuity in leadership for key stakeholders involved in activities at Salinas.