Allens has advised Wesfarmers Chemicals, Energy and Fertilisers (WesCEF) on a proposed joint venture and farm-in arrangement with Ora Banda Mining Ltd (OBM) in relation to certain lithium and other (non-gold) mineral rights in the Davyhurst tenement package.
The deal sees WesCEF acquire 65% of OBM’s lithium and other (non-gold) mineral rights on its Davyhurst tenements for an initial payment of $26 million and a 2% royalty in relation to future production. WesCEF also has the option to solely fund $15 million of exploration over three years to acquire up to 80% of the venture, and further options to acquire up to 100% of the venture in various circumstances.
‘Despite some valuation headwinds, the market remains buoyant for lithium-related M&A. Companies are finding innovative ways, like this complex deal, to invest in early stage lithium plays,’ said lead Partner .
‘The deal is the latest of a number of exciting transactions in the critical minerals sector over the past couple of months, in which we have been involved, as the energy transition accelerates.’
Allens has recently advised on a number of high profile transactions in the critical minerals sector, including Albemarle’s proposed merger with Liontown Resources, the , Codelco’s bid for Lithium Power, , and .
Managing Associate added, ‘We are delighted to have had the opportunity to work closely with the commercial and legal teams at WesCEF on this important transaction, and we look forward to continuing to work with them on the next stages of the process’.
