Lithium X Energy Corp (OTCMKTS:LIXXF) broke out to start the week. This has been a steadfast play in one of the most important themes on the OTC so far in 2017: the lithium boom. Shares popped out above 52-week resistance in action on Monday as news hit that the company was announcing that they have entered into a definitive agreement, pursuant to which NextView New Energy Lion Hong Kong Limited has agreed to acquire all of the issued and outstanding common shares and warrants of Lithium X.
According to the release, Lithium X’s flagship project, Sal de los Angeles lithium brine project, as well as Arizaro Lithium Brine Project are located in the prolific “Lithium Triangle” in mining friendly Salta province, Argentina. If there is any oddity here, it is that the offer is for a cash deal for $2.61/share. And yet, shares of the company closed well below that level.
Lithium X Energy Corp (OTCMKTS:LIXXF) trumpets itself as a company that operates as a lithium exploration and development company in Argentina and the United States.
As noted, LIXXF owns a 50% interest in the Sal de los Angeles project comprising 8,156 hectares located in Salta Province, Argentina. It also owns a 100% interest in the Clayton Valley South project consisting of 477 federal placer mining claims covering approximately 9,540 acres located to the southwest of Tonopah, Nevada; and holds an option to acquire a 100% interest in the NSP Lithium claims covering approximately 5,480 acres located in northern Clayton Valley, Nevada
Lithium X holds option agreements on 15,020 acres (6,078 hectares) in Nevada’s Clayton Valley and land positions both north and south of Albemarle’s Silver Peak lithium brine mine, North America’s only lithium producer, making the Company the largest claim holder in the Clayton Valley. Clayton Valley North covers approximately 5,480 acres (2,217 hectares) in northern Clayton Valley, Nevada. The claims are contiguous to private lands and placer claims belonging to the lithium production facility of Albemarle Corporation. Historic drill information and a geophysical survey show the property covers basin-fill sediments which are similar to the sediments currently producing lithium brines. Two Albemarle production sized wells lie along the boundary. The Company has also acquired the Clayton Valley South Expansion (“Clayton Valley South”), totaling approximately 9,540 acres (3,861 hectares). The property is strategically located contiguous to the Silver Peak lithium mine operated by Albemarle Corp. on the northern boundary, the Clayton Valley South project operated by Pure Energy Minerals Ltd to the east and the Neptune property owned by Nevada Sunrise Gold Corporation to the west.
The company was formerly known as Royce Resources Corp. and changed its name to Lithium X Energy Corp. in November 2015. Lithium X Energy Corp. was founded in 1997 and is headquartered in Vancouver, Canada.
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According to the release on the proposed deal, each common share of Lithium X will be purchased by NextView at a price of $2.61 per share, and each warrant of Lithium X will be purchased by NextView at a price of $0.01 per warrant. The consideration to be received by the Lithium X shareholders pursuant to the Arrangement represents a premium of 29.4% to the 20-day volume-weighted average trading price of the Lithium X shares on the TSX Venture Exchange ending on December 15, 2017 and a 22.5% premium to the closing price of the Lithium X shares on the TSX Venture Exchange on December 15, 2017.
Lithium X Chairman, Paul Matysek and Brian Paes-Braga, Founder, CEO and Director, stated: “Today’s announcement successfully delivers on our team’s commitment to maximize value for our shareholders. Lithium X was founded at a minimal market value and went public two years ago, with a mission to help wean the world off fossil fuels through the development of high-quality lithium deposits. We believe this $265 million transaction puts our flagship asset, Sal de los Angeles, in the hands of a well-funded, technically capable team. We thank NextView and its partners for their commitment to this transaction and provide our best wishes in their continuing efforts to complete on our mission.”
At this time, carrying a capital value in the market of $164.9M, LIXXF has a significant war chest ($12.9M) of cash on the books, which compares with virtually no total current liabilities. The company is pre-revenue at this point. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $LIXXF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $LIXXF, either long or short, and we have not been compensated for this article.