Galan Lithium has confirmed that it has received a takeover bid from clean energy technology company Energy Exploration Technologies (EnergyX) for its lithium assets in Argentina.
In a statement, the company said that EnergyX has made an unsolicited, confidential, conditional, non-binding indicative proposal to acquire Galan’s Salar del Hombre Muerto and Candelas properties in the country.
The offer includes a cash portion of $50m, and common shares in EnergyX with a combined value of $50m.
Additionally, EnergyX will make another $50m available for its wholly owned subsidiary which would own the assets. This fund would be used to complete the first commercial phase of lithium production at Hombre Muerto West and for maintenance.
As per the offer, Galan will also be eligible for a 10% gross revenue royalty for ten years starting from commercial production.
“The Proposal is conditional on, amongst other things, completion of satisfactory due diligence and negotiation and execution of definitive, binding transaction documentation.
“The Proposal remains subject to consideration by Galan’s board, and given the early stage nature of discussions and its conditionality, there is no certainty a transaction will eventuate,” the statement added.
Galan will also need shareholder approval to enter into a binding agreement, if the proposed deal advances.
The company is now seeking to enter into a confidentiality agreement with EnergyX regarding the offer.
ASX-listed lithium exploration and development company, Galan owns 100% stake in lithium brine projects- Hombre Muerto West (HMW) and Candelas on the Hombre Muerto salar in Argentina.
Last year, Galan increased the initial capital cost (capex) required to develop the HMW project in Argentina to $429m after assessing the results of the phase 2 definitive feasibility study (DFS).
