Tecpetrol Investments, a subsidiary of the Techint group, announced that it has submitted a non-binding proposal to acquire Alpha Lithium Corporation, a publicly traded Canadian company whose assets are all in Argentina. It owns the Tolillar lithium projects (Salta) and 5,000 hectares in the Salar del Hombre Muerto (Catamarca), one of the largest reserves of that mineral in the country.
The offer was made on May 15 and came after private negotiations failed. It was for US $ 178 million (241 million Canadian dollars) in cash and, on Tuesday, was rejected by Alpha Lithium, which did not want to consider it or start negotiating.
Techint's proposal valued the Canadian firm's shares at C$1.24 per share, a 13% premium over the May 12 close. And the Argentine company indicated that it was willing to improve the financial terms of its offer if the miner agreed to give it access to its numbers to be able to set a new tighter price and an exclusivity of 30 days.
Despite the rejection, Tecpetrol said it remains prepared to immediately enter into good faith negotiations with Alpha, improve the offer and complete the transaction. The company sought to present itself as a Canadian investor (he noted that it has been operating in that country for 20 years with Tenaris) and stated that its intention is to develop lithium assets as part of an integrated battery supply chain in the West (as opposed to China) and stressed that the offer was in line with Canada's strategy of increasing the supply of critical minerals.
Tecpetrol is the oil arm of Techint and is seeking to put together an energy transition strategy towards more sustainable energies.
To convince Alpha Lithium's shareholders, Techint highlighted its track record, but also said that the Canadian company's project "remains challenging and underfunded." It mentions that todevelop mining assets shareholders will have to divest part of their holdings and that "technical expertise is needed given the risk of development and execution."
Techint also mentioned that the financing of the purchase is not conditional, since the group has the resources to cancel the purchase in its entirety without resorting to external aid.
The list of "benefits" made by the Argentine group was not enough to tempt Alpha shareholders, who considered the offer "opportunistic and does not benefit the best interests of Alpha or its shareholders."
What Techint wants to buy
Alpha Lithium, which in May said it has $35 million in cash for its projects, is in the process of completing construction of a 120-tonne-per-year pilot plant in Tolillar and expects to begin testing lithium carbonate production between the second and third quarters of this year.
Salar del Hombre Muerto, in Catamarca
That plant could use the brine that is extracted from Tolillar as well as the Salar del Hombre Muerto.
Currently, the company has five drilling rigs operating and has already drilled 24 wells in the northern part of the project.
For its part, the exploration project of 5,000 hectares in the Salar del Hombre Muerto (shared by Salta and Catamarca) is the main lithium deposit that is in operation in Argentina.
NE
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