Perth-registered Piedmont Lithium will spend $US12 million for a stake in both Queensland’s Sayona Mining and its Quebec subsidiary.
Piedmont, which has operations in North Carolina, will acquire an initial 9.9 per cent equity of Sayona Mining through a $US3.1 million share placement and a further 10 per cent through two unsecured convertible notes, valued at about $US3.2 million and $US700,000.
The agreements, made at 0.92 cents per share, are expected to close by the end of the week.
Piedmont will have the right to appoint one non-executive director to Sayona’s board, as part of the deal.
Further, the company will pay $US5 million to purchase a 25 per cent stake in Sayona Québec, which holds the rights to mines in Authier, Canada and Tansim, Western Australia.
Sayona is also pursuing a bid to acquire the assets of Québec-based North American Lithium.
The strategic partnership will also bind Sayona Québec to a supply agreement for at least 50 per cent of its spodumene concentrate production, to be bought at market price and supplied on a life-of-mine basis.
Spodumene is used in the production of lithium hydroxide, a component of lithium batteries.
In an ASX release, Piedmont president and chief executive Keith Phillips said the partnership provided multiple benefits.
“Sayona has high quality asset in a favourable location, and the investments are being made at an attractive valuation,” Mr Phillips said.
“The investments are additive to Piedmont from a resources and reserves perspective, and the spodumene supply agreement will offset our Tesla commitments in the near term and position us for longer term growth in lithium hydroxide production.
“This is a very exciting step for Piedmont. We look forward to supporting Sayona’s team as they drive day-to-day activities in Québec, while Piedmont’s team focuses on its core interests in North Carolina.”
Shares in Piedmont were down 3.8 per cent at 2:31pm AEST, to trade at 45 cents.