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Pilbara Minerals Ltd (ASX:PLS) will be shifting its focus (somewhat) to Brazil, as it aims to take on large, hard rock lithium project Salinas as part of an imminent acquisition of owner Latin Resources Ltd (ASX:LTR).
Pilbara has entered into a binding Scheme Implementation Agreement (SIA) with Latin, through which it will buy up all of the latter’s shares, taking on ownership of the flagship Salinas Lithium Project in Brazil’s mining-friendly Minas Gerais region.
The play, according to Pilbara’s statement to the market, could potentially develop into a top 10 producer (excluding Africa) of hard rock lithium within the global market.
Pilbara noted that the acquisition would boost its overall mineral resource holdings by around 20%, enable around 30% of stable production to be added to its business (on the basis of expectations for Salinas), and open the door to new supply opportunities within the North American and European battery markets.
Managing Director and CEO, Dale Henderson said the acquisition represented an important step in growing Pilbara’s business.
“This acquisition is on-strategy, diversifying the business with what we believe is a counter-cyclical, accretive extension that further builds out Pilbara Minerals’ position as one of the leading lithium materials suppliers globally,” he said.
“The acquisition will deliver our second 100% owned, Tier 1, hard rock lithium asset, which is expected to be low-cost and accretive for our shareholders.
“It provides Pilbara Minerals with optionality to sequence new supply and diversify into new growth markets for lithium such as Europe and North America.
“The acquisition follows an extensive period of project assessment globally in which we rank Latin Resources’ Salinas project at the top of our list when benchmarked holistically across a range of key criteria.”
He added that Pilbara had engaged in a six-month period of due diligence focused on the Salinas project and the regional potential of Minas Gerais.
Despite the news, shares in Pilbara Minerals fell to $2.72 by 12:36 AEST, a drop of 4.74% since the market opened.
