Ultra Lithium, which had to find a new backer after Ottawa\u0027s blocked Chinese mining investment, said it avoided a crisis situation. Read on.
It’s difficult to assess if the deal with Power Minerals leaves Ultra better or worse position. Ultra sold Laguna for 25 million Power shares and 25 million “performance rights,” which can be converted to 25 million shares if a resource study indicates that the property contains a mineral estimate of two million tonnes or greater with a decent concentration of lithium.
So, Ultra Lithium will own about 25 per cent of Power Minerals as soon as the deal goes through. In the longer run, Ultra could end up owning about 50 per cent of Power, which would pave the way for it to continue developing the Laguna project with capital raised from the Australian stock exchange, where Power is listed.Ultra issued when it announced the partnership.
“Divesting Zangge’s investment was a setback. We weren’t able to find an alternate source of funding immediately. We were in a crisis situation,” said Pirzada. “This deal will allow us to develop this project, which has a merit for becoming a good lithium-brine asset. Without it, Ultra would not have been able to develop it.”Article contentAfzaal Pirzada, Ultra Lithium’s vice-president of explorationZangge and two other Chinese companies to divest their holdings in Canadian junior miners.
The order was a shock because Canada had long taken a liberal approach to foreign investment in the mining industry. The government said it was important to ensure Canada remained in control ofsuch as lithium, nickel and copper, which are used in electric vehicles and are currently in high demand as nations look to meet their climate goals.
However, analysts also said the order was part of a larger effort by the U.S. and Canada to shift their industries’ supply chains away from China, which dominates the electric vehicle industry, and towards friendlier nations.for its Chinese investor, Sinomine Rare Metals Resources Co., through Australia’s Winsome Resources Ltd. in December.
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