SYDNEY, AUSTRALIA: Lithium Energy Limited (ASX: LEL), a prominent player in the industry, has officially announced the sale of its 90% stake in the Solaroz Lithium Brine Project located in Argentina.

The deal, valued at a substantial US$63 million (approximately A$97 million), was made with CNGR Netherlands New Energy Technology B.V. (CNNET), a subsidiary of the Chinese powerhouse CNGR Advanced Material Co Ltd (Shenzhen: 300919).

This strategic sale marks a pivotal moment for Lithium Energy as it divests from the Solaroz Project, which spans 12,000 hectares of lithium-rich concessions within the renowned Salar de Olaroz Basin, part of South America’s “Lithium Triangle.” The area is known for its JORC Indicated and Inferred Mineral Resource of lithium, positioning Lithium Energy alongside other lithium carbonate producers in the region.

The completion of the sale is contingent upon several conditions precedent, including the approval of Lithium Energy’s shareholders, necessary regulatory consents from China and Argentina, and environmental and concession-related approvals for the Solaroz Project. These conditions are expected to be met or waived within six months from the sale agreement date, i.e., by 25 October 2024, with a possible extension of 60 days if required by either party.

Lithium Energy has reported that CNGR has already secured all necessary Chinese ODI (overseas direct investment) and foreign exchange control regulatory approvals for the sale. A general meeting is anticipated to be convened by late July 2024 to seek shareholder approval as per ASX Listing Rule 11.2.

In parallel with the sale, Lithium Energy is progressing with its other ventures, including the Burke and Corella Graphite Projects in Queensland, Australia, which boast high-grade JORC Indicated and Inferred Mineral Resources of graphite. Furthermore, the company is exploring the development of a lithium carbonate equivalent (LCE) production facility and evaluating direct-lithium extraction (DLE) technologies.

Earlier this year, Lithium Energy and NOVONIX Limited (ASX:NVX) merged their adjoining Burke and Mt Dromedary Queensland Natural Graphite Deposits into Axon Graphite Limited, a Lithium Energy subsidiary. Axon Graphite is set to undertake an IPO valued between $15M and $25M, aiming to join the ASX as a dedicated vertically-integrated mine to Battery Anode Material (BAM) product manufacturing company.

As the sale of the Solaroz Project progresses towards completion, Lithium Energy’s focus will shift to advancing the Axon Graphite IPO and maintaining operations at Solaroz, ensuring all necessary approvals are secured to meet the sale’s conditions precedent.

Lithium Energy partners with Lanshen to build lithium plant in Argentina