Allens has advised dual ASX/TSX-listed lithium exploration company Patriot Battery Metals on the Australian aspects of its strategic partnership with Volkswagen Group, which includes the sale of a 9.9% stake in Patriot for US$48 million, an offtake commitment and a Memorandum of Understanding.
The proceeds of the strategic investment will be used to advance Patriot’s Shaakichiuwaanaan Project, the largest lithium pegmatite resource in the Americas and the eighth largest in the world.
The subscription price per share represented a 65% and 35% premium to the 30-day and 90-day volume weighted average price of Patriot’s shares.
The arrangement includes an offtake commitment by Volkswagen’s 100%-owned vertically integrated battery manufacturer, PowerCo SE, to supply 100,000 tonnes of spodumene concentrate per year over a 10-year term.
A memorandum of understanding will establish an ongoing strategic relationship between PowerCo and Patriot to jointly explore and collaborate on shared strategic objectives, including opportunities for the future development of the Shaakichiuwaanaan Project.
‘We continue to see enthusiasm among EV manufacturers for the lithium sector, with Volkswagen joining the likes of Ford and LG in establishing strategic partnerships with lithium miners in recent years,’ said Counsel Dave Filov, who led the Allens team.
‘We expect overseas investments of this nature to form an increasing part of the critical minerals landscape in Australia. This, combined with ongoing consolidation in the sector, demonstrates long-term support for the lithium market,’ said Partner and Head of Critical Minerals Bryn Hardcastle.
Allens is a leading adviser in critical minerals M&A, financing, project development and offtake arrangements, having advised Rio Tinto, Liontown and Livent on recent critical minerals transactions.
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