(Yicai Global) Oct. 25 -- Wuxi Baichuan Chemical Industry Co. [SHE:002455] is looking to acquire a stake in a Canadian lithium mining firm for USD1.4 million (AUD1.8 million) in a bid to ensure sufficient supplies for the development of its lithium battery business in future.
The Chinese fine chemical manufacturer said today that it has signed a binding trade agreement with Metals Tech Ltd. [ASX:MTC].
Under the agreement, Baichuan will subscribe to 10 million shares to be issued by MTC at the price of AUD0.18 per share.
The Canadian firm will use the proceeds from the share offering for resource classification and profiling of its flagship project, the Cancet lithium mine, and to scale up its business operations and cover routine operating expenses, Baichuan said.
Metals Tech specializes in lithium mineral exploration and development. It currently has exploration rights at six lithium mines in Quebec, Canada, and exploration rights at a cobalt mine in Ontario.
The target company has issued 83,010,840 shares to date, Baichuan Chemical said. Baichuan Chemical did not disclose its shareholding ratio after the deal.
The deal represents an important move in terms of helping the company secure reliable lithium resource supplies, Baichuan said.
The company branched out into the new energy battery development market after issuing an announcement in June last year stating that it had decided to invest in lithium battery technology development and battery production and sales businesses with partners.