Australian lithium producer Pilbara Minerals Limited (ASX: PLS) has announced a strategic acquisition of Latin Resources Limited (ASX: LRS) in a deal valued at approximately $560million. The all-scrip transaction, which will see Pilbara Minerals acquire 100% of Latin Resources, is expected to significantly bolster Pilbara’s presence in the global lithium market.
The acquisition, structured through a scheme of arrangement, will result in Latin Resources shareholders receiving 0.07 new Pilbara shares for each Latin Resources share held. This values Latin Resources at AUD 0.20 per share—a 57% premium to its 10-day volume-weighted average price.
The acquisition aligns with Pilbara Minerals’ strategy to diversify beyond its flagship Pilgangoora operation in Western Australia. The key asset driving the deal is Latin Resources’ Salinas Lithium Project, located in Minas Gerais, Brazil. Salinas is one of the world’s largest undeveloped hard-rock lithium deposits, strategically positioned to supply the fast-growing North American and European battery markets.
Salinas is modelled to become a top 10 global producer of hard-rock lithium, with an anticipated average production capacity of 499 kilotonnes per annum (ktpa) of spodumene concentrate at a grade of 5.2% Li2O . Pilbara Minerals plans to leverage its technical expertise and strong financial position to fast-track the development of Salinas, reducing the project’s funding and operational risks.
For Latin Resources shareholders, the deal offers immediate value through a substantial premium, along with the opportunity to participate in the future upside of the Salinas project.
The acquisition is expected to close by late November 2024, pending shareholder and regulatory approvals.
