Sichuan Yahua Industrial Group Co.Ltd(002497) 2 on the evening of February 27, it was announced that the wholly-owned subsidiary of the company Yahua International Investment Development Co., Ltd. (hereinafter referred to as “Yahua international”) planned to subscribe for 3.7 million shares of Australian Abyssinian Metals Limited (hereinafter referred to as “aby company”) at the price of a $0.75 per share, accounting for 3.4% of the total share capital of aby company before IPO. On February 27, the two sides signed the investment and share subscription agreement and the purchase and sale agreement.
According to the announcement, aby is a battery metal company registered in Australia. The founder and core team of aby have rich experience in the development of major mines in Africa, and the core assets are mainly kenticha lithium mine in Ethiopia (holding 51% equity). Among them, the mining of kenticha lithium mine began in 1990. The area has highly mineralized lithium cesium tantalum (LCT) pegmatite, with 67.4 million tons of proven lithium resources, and the average grade of lithium oxide is 1.03%. Further exploration and development is under way. The total mineralized resources range from 80 million tons to 11000 tons of lithium resources, equivalent to more than 1 million tons of lithium oxide; The resources in the southern and Northern reserves have great potential for future growth, and the overall resource scale can be comparable to the pegmatites of talison, wodgina and other projects in Australia. The overall technical and operation team of kenticha lithium mine comes from the former Galaxy lithium industry in Australia and has long-term good cooperation with Sichuan Yahua Industrial Group Co.Ltd(002497) the lithium concentrate of phase I 200000 t / a (converted into 30000 T / a of lithium carbonate equivalent) production line will be delivered in the second quarter of 2023, and the mine life is expected to exceed 18 years.
According to the agreement, aby company develops the kentica project in Oromia state in southern Ethiopia and sells and delivers lithium concentrate products to Yahua international. The agreement is valid from the date when aby company notifies the products to be ready for shipment to December 31, 2025. Aby company provides no less than 120000 tons of lithium concentrate every 12 monthly contract years. If aby company has excess lithium concentrate in the future, both parties can provide additional lithium concentrate for Yahua international under the conditions agreed in writing.
Sichuan Yahua Industrial Group Co.Ltd(002497) said that the pre IPO equity subscription aims to lock in the lithium concentrate underwriting right of the kentica project and provide sufficient lithium resources for the future development of the company’s lithium industry. With the commissioning of the kentica project, the pre IPO equity subscription and the acquisition of the underwriting right of lithium concentrate will open up new guarantee channels for the company at the upstream resource end of the lithium industry. At the same time, it can also share the excess earnings after the listing of Australian aby company, which will have a positive impact on the company’s future operating performance.
