Zijin Mining completes acquisition of New Lithium Company

Zijin Mining (02899) issued an announcement that the company disclosed the "announcement on the acquisition of Canadian New Lithium Company in Cash" on October 10, 2021. The company paid about C $960 million in cash to acquire Neo Lithium Corp., a company listed on the gem of the Toronto Stock Exchange of Canada. (new Lithium Company) all issued and outstanding common shares. The core asset of New Lithium is the Tres Quebradas (3Q) Salt Lake Project, located in the province of Catamaca in northwestern Argentina.

The 3Q project is located in the famous "Lithium Triangle" in South America. According to the latest feasibility research, the total lithium carbonate equivalent resource is about 7.63 million tons (lithium ion concentration boundary grade 400mg/L), of which: reserves are 1.67 million tons, accounting for 31% of the proven + control resources, and the average lithium ion concentration 786mg/L. The project has the advantages of large amount of resources, high grade, low impurities and good development conditions.

I. Project approval and delivery

As of the date of this announcement, the general meeting of shareholders of Xinli Company has approved the transaction, the approval or filing procedures of domestic and foreign regulatory authorities for the acquisition of shares in Xinli Company have been completed, and the EIA permit for the first phase of the 3Q project has been approved. In view of the fact that all the delivery prerequisites agreed in the arrangement Agreement have been fulfilled, the acquisition will be delivered on January 25, 2022, Toronto time, and the company holds a 100% stake in the new lithium company upon completion of the delivery.

New Lithium plans to apply for formal delisting from the TSX gem on or after the delivery date and stop its offer on the OTCQX over-the-counter Market in the United States and the Frankfurt Stock Exchange in Germany.

II. Pre-project preparation

The company set up a 3Q project team in October 2021 to investigate the project design, construction, technology, equipment, finance, logistics and transportation and related laws and regulations in advance, communicate with scientific research institutions and industry experts in the salt lake lithium extraction industry at home and abroad, and demonstrate and optimize the lithium extraction process according to the brine nature of the project and the feasibility study report. The company has set up the main management and technical team stationed in the 3Q project, and the project construction will be started as soon as possible after the completion of the project delivery.

III. Production planning and process route

(1) according to the feasibility study scheme, the first phase of the project will be designed to produce 20,000 tons of battery-grade lithium carbonate per year, which is expected to be completed and put into production by the end of 2023; the precipitation method is adopted as the main process, which has the advantages of simple and smooth process, low energy consumption and low production cost, and the salt lakes around the project all adopt this process with good reliability.

(2) the company will further optimize the production process and process layout. in view of the low lithium recovery rate in the first phase of the 3Q project, the company organized a technical team to conduct a preliminary experimental study, and there is a possibility to obviously improve the lithium recovery rate and output.

(3) the company intends to further increase the use and promotion of clean energy in the 3Q project in order to reduce the carbon emissions of the project. (4) Yuanxin Lithium Company has carried out a preliminary study on the annual output of lithium carbonate of 40,000 to 60,000 tons. On the basis of the first phase of the project, the company will comprehensively strengthen the technical research on production expansion, put forward the technical transformation and expansion plan in time, and complete the relevant license processing. Achieve the new output target as soon as possible.

The announcement said that the acquisition and development of lithium and related mineral resources are very important prerequisites and conditions for the company to enter the field of new energy and new materials; the successful acquisition of the 3Q project is in line with the company's new energy strategic layout and helps to build the foundation of the new energy industry. it is of great significance to the green and sustainable development of the company.