SMM News: recently, Jiangxi Ganfeng Lithium Industry Co., Ltd. held a meeting on June 28, 2019, passed the motion of Ganfeng International wholly-owned subsidiary Mariana Lithium Industry to provide financial assistance to Litio Company and extend the financial assistance period. Jiangxi Ganfeng International wholly-owned subsidiary Mariana Lithium Industry, Jiangxi Ganfeng International wholly-owned subsidiary Mariana Lithium Industry, without affecting its normal operation, An additional amount of financial assistance not exceeding US $8 million shall be provided to Litio, a controlling subsidiary, and the period of financial assistance shall be extended to the 180th day from the date on which the Mariana project is officially put into operation. Prior to the implementation of the financial assistance, Mariana provided a total financial assistance of no more than US $12 million to Litio. After the implementation of the financial assistance, Mariana provided a total financial assistance of no more than US $20 million to Litio.
Litio was incorporated under Argentine law in the Argentine province of Mendoza on April 5, 2010 and is not yet listed. As of the date of disclosure of this announcement, the number of shares of Litio is 122800, with Mariana Lithium holding a stake of 84.25 per cent and International Lithium holding 15.75 per cent of its shares. Litio, which specializes in mineral exploration and investment, has a 100 per cent interest in the Mariana lithium-potassium brine mine in the province of Salta, Argentina.
The purpose of this transaction is to promote the exploration progress of Litio's lithium-potassium brine project in Mariana, Argentina, to meet the company's future growth demand for lithium resources, and to enhance the long-term competitiveness of Mariana. From Ganfeng lithium industry learned that the transaction will make the company cash flow to produce a certain net outflow, but will not have a significant impact on the company's normal working capital.
In addition, Mariana lithium-potassium brine project may face some risks in operation, Mariana lithium-potassium brine project exploration may be affected by exploration technology, natural conditions and other factors, there is a risk of resource exploration failure. At the same time, the project mining is affected by personnel, technology, equipment and other factors, or natural disasters such as force majeure occurred in the mining area, there may also be the risk of failure in the exploitation of mineral resources.