East Coast Minerals closes in on lithium acquisition

THE BOURSE WHISPERER: Australia-based exploration and mining company East Coast Minerals has entered into a conditional agreement through its major shareholder Exchange Minerals to acquire an 80% shareholding in the ECM Lithium Group.

ECM Lithium Group subsidiary company, ECM Lithium AT GmbH has subsequently entered into a conditional contract with third party vendor Kärntner Montanindustrie GmbH for the acquisition of mining and exploration licenses in the mining area known as the Austrian Lithium Project.

According to East Coast Minerals’ announcement to the Australian Securities Exchange the Austrian lithium project currently has an Inferred JORC Resource of 18 million tonnes grading 1.6% Lithium Oxide.

“Compiling all of the documentation associated with this acquisition has been an enormous task, reflecting the complex cross border legal and accounting issues associated with an acquisition of this size,” East Coast Minerals chairman Nigel Little said in the company’s ASX announcement.

“We look forward with great excitement to finalising the agreement and developing the possibilities that arise from this wonderful opportunity that our major shareholder Exchange Minerals has facilitated and funded”.

A major condition of the acquisition agreement has already been met by Exchange Minerals with the payment of an initial instalment of €3.7 million.

This payment is in addition to the €550,000 the company had already paid for the exclusivity period.

Other key conditions for the contract between Kärntner and ECM Lithium have also been fulfilled, which means ECM Lithium is now awaiting the completion of the approval of the transfer of the exploration and mining licenses by the Austrian mining department known as Montanbehörde.

East Coast Minerals said it has completed technical and legal due diligence reports in relation to the acquisition of the project under the conditional agreements with Exchange Minerals for the acquisition of a total of 80% of the shares in ECM Lithium Group.

The agreements with Exchange Minerals are subject to the following key conditions:

– East Coast Minerals shareholder approval; and

– Completion of the transaction with KMI and the approval of the transfer of the exploration and mining licenses.