Toronto-based Lithium ION Energy (TSX-V:ION) has struck a deal to merge with US-based rare earths recycling and refining company United Rare Earths.
United Rare Earths is a US-owned and operated company developing a rare earths hub in northeast Tennessee that will include a magnet recycling centre, refinery, and technology centre.
The company is in advanced talks with a federal agency for grant opportunities which includes non-recourse, non-dilutive funding.
United Rare Earths also has a memorandum of understanding with a national laboratory to advance rare earth recycling and refining technologies in the US.
Lithium ION CEO Ali Haji says the move is a major development with respect to the company becoming an integral player in the critical metals space.
“We believe completion of the proposed business combination will catapult ION Energy into a diversified battery and critical metals player on the global market,” he says.
“We believe strongly in our lithium assets and the sheer scale and potential UnitedRE brings is compelling to achieve the vital objective of a cleaner, secure, traceable future for humanity.”
United Rare Earths Chairman Jeffrey Willis says the merger will create a foundation for accelerated growth and innovation.
“This partnership enhances our capability to deliver on our shared mission to establish a sustainable, resilient supply chain to power renewable technologies and the electrification movement,” he says.
“Our collective efforts, grounded in a shared vision, will empower us to meet the growing demand for rare earth materials, securing the supply chain for America’s future.”
To support the business combination, Lithium ION Energy, which has a market capitalisation of C$3.9 million ($4.3 million), is undertaking a non-brokered private placement to raise US$2 million ($3.04 million).
The company is offering convertible debentures at US$1,000 each that will mature 24 months from the date of issue.
The debentures will carry an interest rate of 8% per year and will be convertible to common shares at a price of US$0.10 per share.
If the 10-day volume weighted average price of the common shares of Lithium ION Energy exceeds US$0.15 or more on the Toronto Stock Exchange, the company will have the right to accelerate the conversion of the shares.
The cash raised will be used to complete the business combination and develop its rare earth recycling and refining technology, for the continued advancement and exploration of Lithium ION Energy’s lithium assets, as well as working capital.
ION Energy expects the proposed business combination will constitute an “expedited acquisition” under the TSX Venture Exchange’s policies.
Completion of the proposed business combination and offering remains subject to approval by the TSX Venture Exchange.
Lithium ION’s flagship asset is the 65,000+ hectare Baavhai Uul lithium brine project, which the company says represents the “largest and first lithium brine exploration licence award in Mongolia”.
The company also owns the 29,000+ hectare Urgakh Naran lithium brine licence in the Dorngovi Province of Mongolia.
Write to Angela East at Mining.com.au
Images: Lithium ION Energy
