Aussie lithium explorer locks in deal with Chinese battery metal major
- Clearing the milestone means Askari will issue 4.5 million shares at 55 cents each
- Zhejiang Huayou Cobalt Co is an $18bn Shanghai-listed nickel, cobalt and lithium producer
- Huayou will support the Company in further technical input and guidance for continued exploration, development and mine construction
The lithium, gold, and copper explorer with operations in Namibia and Australia has satisfied conditions for the binding strategic agreement with Huayou – a wholly-owned subsidiary of Zhejiang Huayou Cobalt Co. The parent company, listed on the Shanghai Stock Exchange, has a current market capitalisation of around $18 billion.
First announced on 22 March and 23 March, the agreement will see Askari issue 4.5 million fully-paid ordinary shares at an issue price of 55 cents a share to Huayou.
The deal also includes 1.5 million “free attaching” AS20 listed options, with an exercise price of 25 cents and 31 October 2024 expiry date.
Settlement of the Strategic Investment should occur in the coming days.
"Tremendous upside ahead"
Askari’s executive director, Gino D’Anna, has welcomed the milestone, referring to the extensive collaboration that has already occurred between the two organisations, on the “aggressive exploration drilling program” at its Uis Lithium Project in Namibia.
“The satisfaction of the conditions precedent marks the final step for us before settlement can occur, which is expected to take place in the coming days,” D’Anna said.
“The name Huayou is synonymous with the cobalt and lithium sector not only in China, but globally, and we look forward to welcoming Huayou to the register. We continue to see tremendous upside in our Uis Lithium Project and we look forward to sharing the latest drilling results with our shareholders in the coming days.”
Further contract details
The ordinary shares to be issued to Huayou as part of the Strategic Investment are subject to a 12-month voluntary escrow period, with a binding restriction agreement.
The free attaching options issued to Huayou as part of the Strategic Investment will be freely tradeable by Huayou following the Company lodging a cleansing statement.
Under the agreement, Huayou will also be able to participate in future equity issues by Askari Metals.
Huayou is targeting a total equity position of 9.9% - at which point it has the option to appoint a nominee to Askari’s board.
The agreement also states that Huayou will support the Company in areas of mutual strategic interest, including providing technical input and guidance for continued exploration, development and mine construction as well as downstream lithium processing.