Canada Lithium makes friendly offer for Sirocco Mining
TORONTO (miningweekly.com) – Canada Lithium and fellow Canadian iodine producer Sirocco Mining on Wednesday announced a friendly business combination aimed at significant market and growth synergies and overall cost savings.
Canada Lithium, which is developing the advanced Quebec Lithium project in Quebec, was offering 294-million common shares, worth about $120-million, to acquire Sirocco.
Sirocco shareholders would receive 1.175 Canada Lithium shares for each Sirocco share, and the arrangement valued each Sirocco share at C$0.48, which represented a premium of about 23% to the 20-day volume-weighted average share price on the TSX on Tuesday.
Following the transaction, Canada Lithium shareholders would hold about 58% of the combined company, while current shareholders of Sirocco would hold about 42%.
Separately, Sirocco had also agreed to provide Canada Lithium with a bridge loan of up to $10-million, for which Sirocco could choose to receive repayment in cash or Canada Lithium shares.
Each party had agreed to a $4-million deal termination fee under certain circumstances.
“We’re delighted to be joining forces with the Sirocco team. They have an exceptional track record in identifying growth opportunities, establishing sound operations and building wealth for shareholders,” Canada Lithium CEO Peter Secker said.
Commenting on the transaction, Sirocco CEO Richard Clark said: “We have been looking for growth opportunities in the industrial minerals sector and this combination provides an excellent opportunity for geographic and product diversification while at the same time aligning two products with potential future complementary applications.”
Sirocco shares traded 14.47% higher at noon on Wednesday at C$0.435 apiece, and those of Canada Lithium were up 1.25% at C$0.405 apiece.
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