Highlights
- Lithium ION Energy enters LOI for business combination with UnitedRE, expanding into rare earth recycling and refining.
- Company announces US$2 million convertible debenture offering to support the deal and advance lithium assets.
- Partnership aims to create a diversified battery and critical metals player in the global market.
TORONTO, Ontario’s Lithium ION Energy Limited (TSXV: ION) (FSE: ZA4) (“ION” or the “Company”) enters into a letter of intent (LOI) Agreement to progress a business combination with United Rare Earths Ltd. (“UnitedRE”), a US-based rare earths recycling and refining company. UnitedRE secured a strategic location to develop and has significantly advanced discussions with a federal agency for grant opportunities which includes non-recourse, non-dilutive funding. UnitedRE has support at the highest levels of the government and an instrumental MOU with a national laboratory that will advance rare earth recycling and refining technologies in the U.S.
What did the company highlight?
- Cutting edge technology with a clear path to creating a low-carbon, domestic supply of rare earths to the US, leveraging non-recourse funding;
- Rare earth elements required for military applications and essential in the production of motors needed for the energy transition related to electrification – a complementary strategic transaction;
- Lithium continues to play an irreplaceable role in the energy transition and ION’s assets will be at the ready to fill this requirement; and
- Strong combined management teams with deep relationships across government, technology, capital markets and mining.
Convertible Debentures
The Company, ION Energy to support this deal announced a non-brokered private placement offering of convertible debentures of the Company (“Debentures”) at a price of US$1,000 per Debenture for aggregate gross proceeds of US$ 2,000,000 (the “Offering”).
A form of convertible debt, the Debentures will mature 24 months from the date of issue (the “Maturity Date”), carry an interest rate of 8% per year and will be convertible to common shares at a conversion price of $0.10 per share. In the event the 10-day volume weighted average price of the common shares of the Company exceeds $0.15 or more on the Toronto Stock Exchange, the Company will have the right to accelerate the conversion of the shares.
Proceeds of the Offering will be used to complete the business combination with UnitedRE and develop its rare earth recycling and refining technology, for the continued advancement and exploration of the Company’s lithium assets, as well as working capital.
ION Energy expects the proposed business combination will constitute an “expedited acquisition” under the policies of the TSXV. Completion of each of the proposed business combination and the Offering remains subject to the approval of the TSXV.
Ali Haji, CEO & Director – Lithium ION Energy Ltd. reports “I am delighted to announce this major development with respect to becoming an integral player in the critical metals space. We believe completion of the proposed business combination will catapult ION Energy into a diversified battery and critical metals player on the global market. We believe strongly in our Lithium assets and the sheer scale and potential UnitedRE brings is compelling to achieve the vital objective of a cleaner, secure, traceable future for humanity.”
Jeffrey Willis, Chairman of UnitedRE, commented _“_We are excited to announce this strategic step forward with ION Energy, marking a pivotal moment for both organizations. By aligning our resources and expertise with ION Energy, we are creating a foundation for accelerated growth and innovation. This partnership enhances our capability to deliver on our shared mission to establish a sustainable, resilient supply chain to power renewable technologies and the electrification movement. Our collective efforts, grounded in a shared vision, will empower us to meet the growing demand for rare earth materials, securing the supply chain for America’s future.”
Rare Earth Exchanges suggests there will more of this type of deal activity given the challenges of financing and operations in the rare earth material markets.
About Lithium ION Energy Ltd.
Lithium ION Energy Ltd. (opens in a new tab) (TSXV: ION) (FSE: ZA4) priced as of this writing at $0.0700, the firm’s market capitalization is just over 4.5 million. A money loser so far, they will need substantial performance in the form of execution to emerge sustainably in the black.
The company mission makes them focused on exploring and developing high quality lithium resources in strategic jurisdictions. ION’s flagship, 65,000+ hectare Baavhai Uul lithium brine project (opens in a new tab) represents the largest and first lithium brine exploration license award in Mongolia. ION also holds the 29,000+ hectare Urgakh Naran highly prospective lithium brine license in Dorngovi Province in Mongolia. (opens in a new tab) With the acquisition of the Bliss Lake and Little Nahani projects in NWT, Canada, ION has enhanced its lithium asset and jurisdiction profile. ION is well-poised to be a key player in the clean energy revolution, positioned well to service the world’s increased demand for lithium.
About United Rare Earths Ltd.
United Rare Earths, Inc, (opens in a new tab) a U.S. owned company, is dedicated to a domestic approach to the acquisition, refining, and distribution of magnet and rare earth minerals. UnitedRE is developing a domestic rare earths hub in northeast Tennessee.
Operations will include a magnet recycling facility, a separation facility for newly mined materials and a technology center of excellence. The mission is to create a secure, reliable and traceable supply of rare earth minerals to support new and existing domestic based technologies.
In addition to an MOU with a national laboratory to assist with development, design planning and R&D optimization work, UnitedRE also declares to the public that the firm has obtained a team of world-class advisors such as EY (Ernst & Young): research and strategy, King & Spaulding LLP: legal counsel, and Brownstein Hyatt Farber Schreck: government policy.
Daniel
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