Lithium Australia NL (OTC:$LMMFF) has advanced due diligence on their acquisition of the Very Small Particle Company. The VSPC develops new cathode material for lithium-ion batteries. They can produce the battery cathode material through their intellectual property.
In August, Lithium Australia proposed to acquire the unlisted public company. Since then, the company has been undertaking due diligence to support the veracity of the acquisition. The company has stated that the process has been very positive, with investigations progressing well.
The due diligence period has been extended three weeks due to a number of unmet goals for the original schedule. This includes the awaiting the results from the cathode testing in Germany.
The acquisition would give the company access to recycling entry points into energy metals and cathode supply for global battery markets and widespread energy metal capability including processing expertise for both fresh and waste ore.
A decommissioned pilot plant in Brisbane that was set up to produce complex metal oxides/phosphates for cathode production would be included in the acquisition. The plant can be used to establish quality, performance, and reliability of cells produced using the VSPC technology. Also included in the facility are cell production capacity and cathode coating equipment.
Both Lithium Australia and VSPC agree to a non-binding term sheet that will allow Lithium Australia to purchase 100% of all issued capital in VSPC, subject to due diligence. There is also a 75% minimum acceptance condition for consideration of a non-refundable cash payment based on the due diligence period, up to $45,000 and the issuing of up to 61,151,326 Lithium Australia shares and up to 30,575,663 $0.25 partly paid Lithium Australia Shares paid to $0.0001.
Lithium Australia received a loan from Innovative Technology Funding Pty Ltd in the amount of $1.5 million, which continues the company’s active review of its capital management program. The load was issued based on a drawdown facility offset against the 2016/207 research and development rebate and provides access to working capital before the rebate is finalized. Within the next two months, the facility is expected to be extinguished on receipt of the Research and Development rebate. The drawdown mechanic also further gives the company working capital in the short-term.
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