Essential Metals receives a smashing $136m bid from IGO-Tianqui
Nick Sundich, January 9, 2023
Essential Metals (ASX:ESS) is the first ASX resources company to receive a takeover offer in 2023. It has received a $136m offer from TLEA – a joint venture owned 51-49 by Tianqi Lithium and IGO (ASX:IGO) respectively – and Essential’s board has unanimously recommended the offer.
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Why Essential Metals?
Essential Metals owns the Pioneer Dome Lithium project. A Mineral Resource of 11.2Mt @ 1.2% lithium was defined at the northern part of the 450km project, although there is no resource established for the entire project.
Pioneer Dome lies right in Western Australia’s lithium corridor, around 130km south of Kalgoorlie. Nearby mines include Mt Holland, Mt Cattlin. and Greenbushes, with the latter belonging to IGO.
IGO told its shareholders the deal was aligned with TLEA’s strategy and will diversify and expand its WA lithium portfolio. The deal will be funded with TLEA’s cash reserves and IGO will manage exploration and initial project studies once the deal is complete.
The deal appears a “fait accompli”
Essential Metals was targeting production at Pioneer Dome by 2025 and was seeking offtake and financing deals. In light of the takeover offer, however, the company has told shareholders these discussions have been put on hold.
The deal, worth $136m and at a ~45% premium to Friday’s closing price, is set to be voted on in April 2023. The board told shareholders it will be voting for the deal in absence of a superior proposal.
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