LIT:CC - This $189 Billion Revenue Automaker Just Bet $90 Million that Argentina Lithium (LIT.V) will Become a Producer
(TheNewswire)
October 6, 2023 – TheNewswire – Global Stocks News – On October 5, 2023 Argentina Lithium (TSXV: LIT) (FSE: OAY3) (OTC: PNXLF) announced that it has closed a deal with $189 billion revenueautomaker Stellantis (NYSE: STLA) .
According to the terms of the deal, Stellantis will strategically invest USD $90 million in funding, resulting innew entity ALE, 19.9% owned by Stellantis, 80.1% byArgentina Lithium.
Resource and tech companies like to talk about inflows of “smartmoney”. But the “smart money” often exits before the retailinvestors. For Stellantis, there is only one winning position fromits $90 million investment: Argentina Lithium becomes a producer.
LIT is developing a number of high-quality lithiumprojects in Argentina and advancing them toward production in order tomeet the growing global demand from the battery sector.
The deal will give Argentina Lithium the financial resources toaccelerate the development of its lithium assets, while providingStellantis with up to 15,000 tonnes of lithium per annum, for a 7-yearperiod when LIT becomes a lithium producer.
Stellantis, one of the world's largest automakers, is known for itsmajor brands such as Abarth, Alfa Romeo, Chrysler,Citroën, Dodge, DS Automobiles, Fiat, Jeep ® , Lancia,Maserati, Opel, Peugeot, RAM, Vauxhall, Free2Move and Leasys.
STLA has a sprawling global footprint, with operationsin Europe, North America, the Middle East, Africa, South America,China and India. The market cap is $59 billion. Last reported full-year Stellantisrevenue (2022) was USD $189 billion.
Stellantis booked explosive 41% y-o-y growth in BatteryElectric Vehicles (BEV). Unlike hybrids, BEVs are poweredexclusively by a battery-operated electric motor, which is charged viathe power grid.
A typical EV battery has about 8 kilograms oflithium,” states EVbox . “ Although this can often be much more depending on the batterysize.”
"We are delighted to have Stellantis as a partnerin the future development of our lithium projects in Argentina,”stated LIT President & CEO Nikolaos Cacos, “Together, we share avision to build a sustainable lithium mining operation for thefuture.”
On September 28, 2023, Cacos joined Steve Darling fromProactive Investors to discuss the strategic $90 million agreementwith Stellantis.
“The $90 million does a lot for us,” Cacos toldProactive Investors. “It allows us to not think about fundinganymore.”
“We have four exploration projects, all located inArgentina, within the prolific lithium triangle,” Cacos continued.“Where about 60% of the world's lithium is found. We're advancing,we're drilling and defining resources.”
“With this $90 million investment, our goal is todouble if not triple our exploration efforts, to see if we can get toa resource stage much sooner than initially anticipated”.
Stellantis has a track record of making savvy upstream investments.
On August 17, 2023 Stellantis announced a $100 million investment in CTR toadvance the development of geothermal lithium project in California
“Stellantis has emerged as the world’s fourth-largest car companyby sales, ahead of GM and Ford,” reports the Wall Street Journal . “Sales ofrugged Jeep SUVs and brawny Ram pickup trucks in the U.S. are a majorprofit generator”.
“But the company is more diverse than its two rivals, which generatenearly all of their profits in North America,” continued the WSJ.“It has established European brands, such as Peugeot and Opel, and astrong presence in South America”.
The price of lithium products sold by ALE under theOfftake Agreement will be based on an agreed market-based priceformula at the time of each shipment.
LIT is part of the Grosso Group, which has a vastnetwork of local and regional contacts in Argentina. The GrossoGroup has formed strategic alliances and negotiated with mining majorssuch as Barrick, Teck, Newmont, Viceroy and Vale.
“Having a partner like Stellantis validates theprojects and the work that we've been doing,” confirmed Cacos,“I'm very proud to have an organization of that stature alongside ajunior exploration company like Argentina Lithium”.
Contact: guy.bennett@globalstocksnews.com
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