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Highlights
- Leo Lithium announces completion of Goulamina Lithium Project stake sale.
- US$116.3M first tranche payment expected in early 2025.
- Financial results update set for December release.
Leo Lithium (ASX:LLL) has confirmed a significant transaction involving the sale of its interest in the Goulamina Lithium Project (GLP) to Ganfeng, a prominent Chinese lithium company. The deal marks a pivotal move for Leo Lithium, which will no longer be associated with the GLP project after transferring its 40% stake in Mali Lithium BV.
The first tranche of the transaction is valued at US$116.3 million, equivalent to approximately A$180 million, and is slated for delivery in January 2025. This amount comes after the deduction of a US$44.7 million capital gains tax, directly paid by Ganfeng to the Malian government.
The total gross consideration for the sale amounts to US$161 million. Leo Lithium noted that the tax liabilities align with previous estimates disclosed earlier in the year. Additionally, a second tranche of US$171.2 million is expected by mid-2025, with an interest rate of 2% applicable until payment is made.
This development follows Leo Lithium’s trading suspension in October 2023, amidst industry-wide disruptions caused by a downturn in lithium prices. Despite these challenges, the company’s ability to secure a substantial cash inflow through this deal demonstrates resilience and adaptability in navigating market fluctuations.
The funds generated from the sale will be distributed to shareholders in January 2025, as confirmed by the company. Leo Lithium also announced that the completion of the transaction positions them to release their financial results for the first half of 2024. The report, covering the period ending June 2024, is anticipated to be published in early December.
Leo Lithium emphasized that the transaction enables it to focus on upcoming opportunities and strategies beyond the Goulamina project. The partnership with Ganfeng underscores the global interest in critical lithium resources, with the Goulamina project being recognized as a high-potential asset in the growing lithium sector.
As the market closely watches this development, Leo Lithium's financial updates in December will provide insights into the company’s direction post-sale. This sale marks a transformative moment for Leo Lithium, ensuring a robust financial position as it transitions into its next phase of growth.
