- Iron ore miner Strike Resources (SRK) has successfully spun out its lithium and graphite assets into a new entity dubbed Lithium Energy (LEL)
- After completing a $9 million initial public offering (IPO) on April 29, Lithium Energy will emerge with a $16 million market cap and shares worth 20 cents each
- Strike shareholders were given priority for LEL subscriptions under the IPO, which the company said were significantly oversubscribed
- As such, SRK shareholders will keep their full entitlements under the IPO, while public subscribers who were not part of the priority offer will have their subscriptions scaled back
- Lithium Energy’s portfolio includes the 12,000-hectare Solaroz Lithium Project in Argentina’s “lithium triangle”
- Now that it has completed its IPO, Lithium Energy will look to list on the ASX and expects to go public in mid-to-late May
- Shares in Strike Energy closed 1.82 per cent lower this afternoon at 27 cents each
Iron ore miner Strike Resources (SRK) has successfully spun out its lithium and graphite assets into a new entity dubbed Lithium Energy (LEL).
Strike flagged its plans to form a new standalone company out of some of its existing assets in March. Today, Strike told shareholders Lithium Energy’s $9 million initial public offering (IPO) successfully closed on Thursday, April 29.
This means LEL will have a $16 million market cap and shares worth 20 cents a pop.
Strike said the IPO was “significantly” oversubscribed, with SRK shareholders given first dibs on shares in the new entity.
Under the terms of the IPO, Strike shareholders could buy a minimum of 10,000 Lithium Energy shares proportionate to their shareholding in Strike Resources.
Strike said shareholders who applied for shares under this pro-rata offer will be given their full entitlement, while public applicants who were not part of the priority offer will have their subscriptions scaled back.
Strike itself owns 34.4 million shares in the new entity, meaning it retains a 43 per cent shareholding in Lithium Energy.
Lithium Energy’s portfolio includes the Solaroz Lithium Project in Argentina’s “lithium triangle”. This 12,000-hectare project is highly prospective for lithium, according to Strike, and is surrounded by projects being built up by the likes of Orocobre (ORE) and Lithium Americas Corporation.
Orocobre is the subject of a potential $4 billion merger with ASX lithium darling Galaxy Resources.
Now that Lithium Energy’s IPO is complete, the company will now work towards an official ASX listing. Strike said this is anticipated for mid-to-late May 2021.
Shares in Strike Energy closed 1.82 per cent lower this afternoon at 27 cents each. The company has a $65.65 million market cap.