Under the background of the high prosperity of the lithium battery industry, Yahua Group (002497) plans to subscribe for the equity of Canada Super Lithium Company with 5 million Canadian dollars (contract 25.39 million yuan), laying out the upstream resource end of the lithium industry and increasing the main business.
On the evening of April 17, Yahua Group announced that on April 17, 2022, Yahua International Investment and Development Co., Ltd. (hereinafter referred to as “Yahua International”), a wholly-owned subsidiary of the company, and Canada Ultra Lithium Company (English name: UltraLithium Inc. , hereinafter referred to as “Super Lithium Company”) signed the “Equity Subscription Agreement”, intending to invest 5 million Canadian dollars to subscribe for 21,276,596 shares of Super Lithium Company at a price of 0.235 Canadian dollars per share, accounting for the total share capital of Super Lithium Company as of the date of this announcement of 13.23%.
At the same time, Yahua International purchased a 60% stake in a wholly-owned subsidiary of Super Lithium Corporation with cash, and controlled its Forgan Lake hard rock spodumene lithium ore project and Georgia Lake hard rock spodumene lithium ore project. On the same day, the two parties signed the “Sale and Joint Venture Agreement”.
The announcement shows that Canada Ultra Lithium was established on November 2, 2004. It is an exploration and development company listed on the GEM of the Toronto Stock Exchange of Canada. The company’s stock code is TSXV: ULT. It focuses on the exploration and development of lithium, gold and copper resources. development. Ultra Lithium owns brine lithium mines in Argentina, hard rock spodumene-type lithium mines in the Georgia and Forgan Lakes regions of northern Ontario, Canada, and copper and gold mining rights and exploration rights in many areas of Argentina.
According to Yahua Group, the Forgan Lake hard rock spodumene lithium ore project and the Georgia Lake hard rock spodumene lithium ore project are located in Ontario, Canada, with a total mining area of 26.72 square kilometers, and the Forgan Lake project is based on the surface outcrop area. The estimated resource is 6.4 million tons, the average grade of lithium oxide is 2.2%, and the estimated lithium oxide equivalent is about 140,000 tons; the Georgia Lake project mine has an estimated resource of 5.4 million tons based on the surface outcrop area, and the average grade of lithium oxide is 1.2%. The equivalent is about 65,000 tons.
The geological and metallogenic background of the Canadian lithium ore project is similar to that of Meika. According to the preliminary exploration results, the first phase will design and build a lithium concentrate mining and dressing plant with a capacity of 200,000 tons/year of 6% lithium oxide, and the continuous operation time is not less than In 10 years, in the later stage, the production capacity will be expanded to 400,000 tons in the second phase of construction based on further detailed investigation. The Laguna Salt Lake Project in Catamarca Province, Argentina consists of three mining licenses, with a mining rights area of 117 square kilometers and a lithium ion grade of up to 1270mg/L.
The announcement shows that as of October 31, 2021 (audited), Super Lithium has total assets of about CAD 3.17 million, liabilities of about CAD 140,000, net assets of about CAD 3.03 million, operating income of 0, and net profit of -C$740,000. As of January 31, 2022 (unaudited), Super Lithium has total assets of approximately CAD 6.16 million, liabilities of approximately CAD 280,000, net assets of approximately CAD 5.88 million, operating income of 0, and net profit of -15 million Canadian dollars.
Yahua Group said that since the Forgan Lake Lithium Mine Project and the Georgia Lake Lithium Mine Project of Super Lithium Corporation are currently in the exploration stage, the transaction price of the company’s acquisition of a wholly-owned subsidiary of Super Lithium Corporation comprehensively considers various factors and is determined by the two parties after negotiation. , in line with international M&A transaction practices and will not harm the interests of both parties.
In the view of Yahua Group, the subscription for the shares of Canada Super Lithium Company and the investment in the mining rights of spodumene mine is the company’s further layout in the upstream resource end of the lithium industry. The exploration, development, construction and commissioning of lithium ore projects will help enrich the company’s future upstream lithium resources, improve the company’s lithium ore independent and controllable capabilities, and further enhance the company’s profitability and comprehensive competitiveness, which is in line with the company’s lithium industry strategic development plan. This equity subscription and mining rights investment will have a positive impact on the company’s future financial position and operating results. However, the project also has risks that the actual total resources, reserves, and actual recoverable reserves are inconsistent with expectations.