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Highlights
- Allkem sold previously acquired Borax Argentina S.A. to Golden Wattle.
- In exchange, Allkem received 100% of the Maria Victoria lithium tenement.
- Following the news, shares of Allkem were in the red, down 0.404%.
On 16 December 2022, the global lithium chemical company Allkem Limited (ASX:AKE) announced selling its previously acquired boron producer Borax Argentina S.A. (Borax) to Golden Wattle Springs Pty Ltd. In exchange, Minera Santa Rita S.R.L. (MSR) sold the Maria Victoria lithium tenement to an Allkem subsidiary.
The ASX announcement had an adverse effect on the price of Allkem Limited shares. At 10:37 AM AEDT on 19 December, one share of Allkem was valued at AU$12.310 with a loss of 0.404%.
The company has been trying to execute these transactions since August 2022. Allkem offered to buy 100% of the Mara Victoria lithium tenement situated north of the Olaroz Lithium via an ASX filing on 15 August 2022. According to the transaction’s terms, Allkem will transfer all of its shares in the Borax holding companies to MSR, alongside US$14 million in cash to cover employee and rehabilitation liabilities.
Share performance of Allkem in a year
With today’s decline, the share price of Allkem plunged 13.87% in a month, along with a 6.18% decline in the last five trading days. On the contrary, shares of Allkem witnessed a 25.51% increase over the previous six months, 9.82% on year-to-date (YTD), and 33.84% over 12 months.
Details of Allkem’s Borax sale and Maria Victoria acquisition
According to the ASX release, the company has completed transferring all its issued shares in the Borax holding companies to Golden Wattle, a group associated with MSR. Allkem stated that the sale of Borax Argentina S.A. would not affect its employees; existing ones will continue working at Borax.
The company has a few expectations upon the completion of both transactions. As per the ASX filing:
- Borax will transfer to Allkem subsidiaries certain assets, lithium tenements, and related lithium royalties held in the Cauchari, Olaroz, and Hombre Muerto salars, pending third-party and government approvals.
- On standard industry terms, Allkem subsidiaries have agreed on granting Borax certain borate extraction rights over the assets, with the option for those subsidiaries to later repurchase those extraction rights.
Commenting on the transactions, Martin Perez de Solay, CEO and managing director of Allkem said:
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Data Source: Company announcement dated 16 December 2022
