Lithium Chile Considers Spin Out Of Argentina Assets As It Continues To Evaluate Potential Transactions

FULL DISCLOSURE: This is sponsored content for Lithium Chile.

Lithium Chile (TSXV: LITH) is reporting that it has continued to see interest in its assets from third parties, as it continues the process of evaluating various options for the company following the appointment of PI Financial as a corporate advisor late last year.

The lithium explorer is said to have seen interest from a number of third parties for a potential transaction. The company has indicated that such transactions may include its Salar de Arizaro asset, found in Argentina, or its portfolio of assets in Chile.

One alternative that may be selected by the company is said to the splitting of its assets into separate companies, with its Argentina-based assets to fall under one entity, while its Chile-based assets would fall under a separate entity. If this path forward were to be selected, Lithium Chile has indicated that it would spin-out the Argentinian assets into a new entity, while it would retain control of its Chile projects.

WATCH: Lithium Chile: Unearthing Argentina’s ‘White Gold’ Rush

The argument put forth by the company for a spin-out transaction is that it would enable a more straightforward process for a third party interested in specific country-based projects, while capturing value for its full portfolio of assets.

Lithium Chile currently has a portfolio consisting of thirteen projects in total within the lithium space, all of which are located in Chile, save for the Arizaro project. The company also holds four gold, copper, and silver projects, which are based in Chile as well. The flagship asset, Arizaro, consists of 29,245 hectares of prospective land, which boasts an after-tax net present value (8%) of US$1.1 billion, and total indicated and inferred resources of 3.32 million tonnes of lithium carbonate equivalent.

A prefeasibility study is currently anticipated to be completed for Arizaro in April 2024.

Lithium Chile last traded at $0.64 on the TSX Venture.

FULL DISCLOSURE: Lithium Chile is a client of Canacom Group, the parent company of The Deep Dive. Canacom Group is currently long the equity of Lithium Chile. The author has been compensated to cover Lithium Chile on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.

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