Pilbara Minerals to Acquire Latin Resources After Shareholder and Court Approval
Latin Resources has secured shareholder and court approvals for its acquisition by Pilbara Minerals, marking a pivotal transition for the Salinas Lithium Project in Brazil. The deal positions Salinas as a key global lithium asset under new stewardship.
- Binding Scheme Implementation Agreement with Pilbara Minerals approved by shareholders and WA Supreme Court
- Salinas Lithium Project's Integrated Plan of Economic Development approved by Brazilian National Mining Agency
- First $5 million drawdown from $10 million Pilbara Minerals loan facility completed
- Demerger of non-core assets executed with distribution of ESG Minerals shares
- Latin Resources to cease public reporting post-acquisition, handing over operations to Pilbara Minerals
A Transformational Quarter for Latin Resources
Latin Resources Limited (ASX: LRS) has closed out 2024 with a landmark quarter that culminates in its acquisition by Pilbara Minerals Limited (ASX: PLS). The binding Scheme Implementation Agreement (SIA) announced in August 2024 has now received all necessary approvals, including a decisive shareholder vote and the Western Australian Supreme Court's sanction. This transaction marks the end of Latin Resources as an independent entity after 15 years and ushers in a new chapter for its flagship Salinas Lithium Project in Minas Gerais, Brazil.
Salinas Lithium Project: A World-Class Asset
The Salinas project, wholly owned by Latin Resources, has been recognised as one of the world's premier undeveloped lithium deposits. The Brazilian National Mining Agency's recent approval of the project's Integrated Plan of Economic Development satisfies a critical condition precedent for the acquisition, underscoring the project's regulatory readiness. With a global mineral resource estimate upgraded to 77.7 million tonnes at 1.24% Li2O, Salinas is poised to become a top 10 hard rock lithium operation globally, excluding Africa.
Financial and Corporate Developments
During the quarter, Latin Resources drew down the first $5 million tranche from a $10 million loan facility provided by Pilbara Minerals, bolstering its cash position to $4.6 million at December 31, 2024. The second tranche was drawn down shortly after the quarter's end. Concurrently, Latin Resources executed a demerger of its non-core Australian, Peruvian, and Argentinian assets, distributing shares in ESG Minerals Limited to shareholders. This strategic refocus aligns with the transition to Pilbara Minerals' stewardship.
Leadership Reflections and Future Outlook
Managing Director Chris Gale reflected on the milestone, expressing gratitude to employees, directors, and shareholders for their dedication over the past decade and a half. He emphasised the significance of the Salinas project and conveyed confidence that Pilbara Minerals will build upon Latin Resources' achievements. The acquisition is expected to be implemented on February 4, 2025, with Pilbara Minerals shares issued to eligible Latin Resources shareholders shortly thereafter.
Market and Industry Implications
This acquisition consolidates Pilbara Minerals' position as a leading global lithium producer, complementing its existing operations in Western Australia with a strategically located South American asset. The Salinas project’s development flexibility to supply emerging markets in the USA and Europe aligns with global lithium demand trends driven by electric vehicle and battery storage growth. Investors will be watching closely as Pilbara Minerals integrates Salinas into its portfolio and advances development plans.
Bottom Line?
Latin Resources' handover to Pilbara Minerals signals a new era for Salinas, with market eyes on execution and growth.
Questions in the middle?
- How will Pilbara Minerals prioritize development and capital allocation for the Salinas Lithium Project?
- What are the expected timelines and milestones for Salinas under Pilbara Minerals' management?
- How will the demerger of non-core assets impact Latin Resources’ former shareholders and ESG Minerals’ prospects?
