The Australian company Galan Lithium Limited, owner of two brine lithium projects in Argentina, has clarified recent media reports suggesting the existence of a takeover bid. The company has stated that it has not received any purchase offer, but it has received an unsolicited, confidential, conditional, and non-binding proposal from Energy Exploration Technologies (EnergyX) for the potential acquisition of its lithium assets.
By Panorama Minero
According to company executives, the proposal from EnergyX involves the acquisition of Galan's assets and properties in Hombre Muerto West and Candelas for a total of US$50 million in cash and common shares of EnergyX, also valued at another US$50 million. It is worth noting that EnergyX is a corporation incorporated under the laws of Puerto Rico, and its securities are not quoted or traded on any stock exchange.
The proposal also includes an additional contribution of US$50 million, which would not be paid directly to Galan but to a wholly-owned subsidiary of EnergyX that would own the project assets. These funds would be entirely dedicated to completing the first commercial phase of lithium production at Hombre Muerto West and maintaining the project assets. Moreover, EnergyX would offer Galan a 10% gross revenue royalty for ten years starting from the commencement of commercial production.
"Galan has been seeking to negotiate a confidentiality agreement with EnergyX regarding the proposal. This confidentiality agreement is currently under consideration by EnergyX," they communicated on Tuesday.
"The proposal is conditional, among other things, on the completion of satisfactory due diligence and the negotiation and execution of definitive, binding transaction documentation. Given the preliminary nature of the discussions and the conditionality of the proposal, there is no certainty that the transaction will take place. Furthermore, since the proposal contemplates the disposition of Galan's main undertaking, the approval of Galan's shareholders would be a necessary condition for completion under a binding agreement, should such an agreement materialize."
