Erris Resources plc and Bacanora Lithium are in the “advanced stages” of a reverse takeover under which Erris will acquire Bacanora’s 50% stake in Deutsche Lithium GmbH in exchange for new shares in Erris.
Bacanora’s shares rose 4% after the deal announcement on Wednesday, while Erris temporarily suspended trading in its shares.
Deutsche Lithium’s main asset, the Zinnwald Lithium Project, lies 35km from Dresden and would be Erris’ first project in Germany.
“Zinnwald is considerably further along the development curve than any of our existing assets,” said Erris Resources Chairman Anton du Plessis. Erris has projects in Ireland, Sweden, Norway, and Scotland.
Lithium is a major ingredient in electric car batteries and the European Union is keen to boost local production.
The EU on Sept.3 added lithium to its list of critical metals, and set out a plan to guarantee supply.
The European Commission highlighted lithium as essential for a shift to environmentally-friendly transport and energy storage.
Under the deal, Erris would get 1.35 million euros in cash as well as the 50% stake in exchange for new Erris shares which would leave Bacanora a 70% owner of the company.
Bacanora would also get a net profit royalty from the Zinnwald project, details of which Erris said would be set out later.
Source: Reuters.com