Pilbara Minerals Strengthens Lithium Position with Latin Resources Acquisition

Pilbara Minerals Limited and Latin Resources Limited announced that they have signed a binding Scheme Implementation Agreement (SIA). Under this agreement, Pilbara Minerals intends to acquire all outstanding shares of Latin Resources through a Court-approved scheme of arrangement in accordance with Part 5.1 of the Corporations Act 2001 (Cth). This strategic move is set to consolidate Pilbara Minerals' position in the industry by integrating Latin Resources into its portfolio.

Pilbara Minerals Limited is set to acquire Latin Resources Limited in a strategic all-share transaction that offers significant mutual benefits. Pilbara Minerals will gain control of Latin Resources’ flagship Salinas Lithium Project, located in the premier mining region of Minas Gerais, Brazil. Salinas holds the potential to rank among the top ten hard rock lithium operations globally (excluding Africa), with development flexibility to tap into emerging markets. This acquisition promises to enhance Pilbara Minerals' position in the lithium sector.

For Latin Resources shareholders, the deal offers an immediate premium and the opportunity to realize the full value of Salinas by leveraging Pilbara Minerals’ extensive experience in hard rock lithium projects. Shareholders will also gain immediate exposure to Pilbara Minerals’ established Pilgangoora operation. The acquisition is strategically timed and counter-cyclical, providing a premium to Latin Resources’ shareholders while being accretive to Pilbara Minerals in terms of net asset value (NAV), Mineral Resources, and future production.

The Salinas project is expected to contribute significantly to Pilbara Minerals' pro-forma operations, adding approximately 20% to its Mineral Resources and potentially up to 30% of its steady-state production once Salinas reaches full capacity. The project will also open new supply opportunities in the North American and European battery markets.

Under the terms of the agreement, Latin Resources shareholders will receive 0.07 new Pilbara Minerals shares for each Latin Resources share held, resulting in an approximate 6.4% ownership in Pilbara Minerals upon completion of the Scheme. This share exchange will offer Latin Resources investors diversification benefits, enhanced market positioning, increased liquidity, improved access to capital markets, and inclusion in relevant ASX and global indices.

The transaction, based on Pilbara Minerals’ closing price of A$2.85 per share on 14 August 2024, values Latin Resources shares at about A$0.20 per share. This represents a 57% premium over the 10-day volume-weighted average price (VWAP) of A$0.127 and a 32% premium over the 30-day VWAP of A$0.151.

The Latin Resources Board has unanimously endorsed the Scheme, provided no superior proposals arise and an independent expert confirms that the Scheme is in the best interests of its shareholders. The Board members, holding 4.8% of Latin Resources’ shares, and major shareholder José Luis Manzano (7.9%) have pledged to vote in favor of the Scheme, subject to these conditions. Additionally, Latin Resources’ Managing Director, Chris Gale, will join Pilbara Minerals as a consultant for 12 months to ensure continuity and facilitate key activities at Salinas.