SYDNEY, AUSTRALIA: Lithium Energy Limited (ASX:LEL) and NOVONIX Limited (ASX:NVX) have announced the merger of their adjoining Queensland Graphite Assets into a new entity, Axon Graphite Limited.

The merger is set to revolutionize the Battery Anode Material (BAM) sector with the creation of a vertically-integrated company that will be listed on the ASX through an Initial Public Offering (IPO).

The combined assets include the high-grade Burke and Mt Dromedary Graphite Deposits, boasting a total indicated and inferred mineral resource of over 22.6 million tonnes at significant grades of Total Graphitic Carbon (TGC).

This merger is expected to yield substantial operational synergies and economies of scale, particularly in the development of a BAM Manufacturing Facility in Queensland.

Axon Graphite also incorporates the Corella Graphite Deposit, further solidifying its position with an inferred mineral resource of 13.5 million tonnes at 9.5% TGC.

The company aims to raise $20 million through the IPO, with a minimum subscription target of $15 million and the possibility of oversubscriptions up to $5 million, pricing the shares at $0.20 each.

Eligible shareholders of Lithium Energy and NOVONIX will have the opportunity to participate in a priority offer of Axon Graphite IPO shares.

Following the IPO, both companies will maintain a significant stake in Axon Graphite, holding a 25% cornerstone equity each.

Petra Capital has been appointed as the Lead Manager of the IPO, with the prospectus expected to be lodged in the coming weeks.

This strategic merger marks a significant step forward in the quest for a sustainable energy future, leveraging the rich natural resources of Queensland to meet the growing global demand for efficient and environmentally-friendly battery technology.

Executive Chairman of Lithium Energy, William Johnson: The consolidation of the adjacent high quality Burke and Mr Dromedary graphite deposits will create a
world-class inventory of high-grade graphite to support plans to develop an Australian-based, vertically integrated battery anode material (BAM) business.

We expect significant operational synergies and economies of scale will be gained from the consolidation of these adjacent graphite deposits.

We are delighted also to have NOVONIX as a partner in Axon Graphite. NOVONIX has established an enviable position within the global battery industry and their experience and industry contacts will be of great value for Axon Graphite moving forward.

Through a priority offer to Lithium Energy shareholders and Lithium Energy’s retained interest in Axon Graphite (post IPO), shareholders will benefit from significant upside exposure to a dedicated Australian
graphite business.

CEO of NOVONIX, Dr Chris Burns:
The growth opportunity in the electric vehicle and energy storage systems battery markets for anode materials and high-grade graphite products is significant over the next decade.

We believe the combination of the Mt Dromedary and Burke assets will enhance the scale and economics of these  resources and provide the focus for the development of a substantial natural graphite mine and business. We believe a stand-alone vehicle provides the opportunity to attract new development capital to enable the development of the resource and production of highly refined grade natural graphite for EVs and ESS. It will also highlight the value of these assets for NOVONIX shareholders.