Europe’s first lithium mine has agreed to merge with Sizzle SPAC, a special purpose acquisition company (SPAC), in a deal that will give the mine a market value of $1.4 billion.
The deal, which was announced on April 5, 2021, will see the lithium mine, called Bacanora Minerals Ltd., become a publicly traded company. Bacanora is a Canadian-based company that owns the Sonora Lithium Project in Mexico, which is one of the world’s largest lithium deposits. The project is expected to produce up to 25,000 tons of lithium carbonate equivalent per year.
The merger will be completed through a reverse takeover, with Sizzle SPAC, which is listed on the Nasdaq, acquiring all of Bacanora’s outstanding shares. The deal is expected to close in the third quarter of 2021.
Under the terms of the deal, Sizzle SPAC will issue $200 million in cash, $100 million in stock, and $350 million in debt to Bacanora shareholders. The deal will also give Bacanora shareholders warrants to purchase Sizzle SPAC stock.
The merger is expected to provide Bacanora with the funds it needs to complete the development of the Sonora Lithium Project and begin production. The project is expected to be completed by the end of 2022, with production beginning in 2023.
The Sonora Lithium Project is expected to produce a high-quality lithium concentrate, which is used to make lithium-ion batteries for electric vehicles, consumer electronics, and energy storage systems. The project is expected to be a major supplier of lithium to the global market.
The merger is a major milestone for Bacanora and the lithium industry in Europe. It marks the first time a European lithium mine has gone public, and it is expected to be a catalyst for other lithium projects in Europe.
Bacanora CEO Peter Secker said in a statement, “This is a major milestone for Bacanora and the lithium industry in Europe. We are delighted to be partnering with Sizzle SPAC and look forward to working together to bring the Sonora Lithium Project to fruition. This transaction will provide us with the capital and resources we need to develop the project and become a major supplier of lithium to the global market.”
Sizzle SPAC CEO and Chairman Michael Klein said in a statement, “We are excited to partner with Bacanora to bring their Sonora Lithium Project to market. This is an exciting opportunity to invest in a high-quality, low-cost lithium project that is well-positioned to capitalize on the rapidly growing global demand for lithium. We look forward to working with Bacanora to bring this project to fruition.”
The merger is expected to be a major boon for the European lithium industry and will help spur the development of other lithium projects in the region. It is also expected to provide a boost to the electric vehicle industry, as the Sonora Lithium Project is expected to be a major supplier of lithium for electric vehicle batteries. The deal is expected to close in the third quarter of 2021, and Bacanora Minerals Ltd. will become a publicly traded company upon completion of the merger.
