Chinese electric vehicle company NIO takes $12m position in lithium play Greenwing Resources
Greenwig Resources’ San Jorge project is located in Argentina’s Catamarca province.
Greenwing Resources (ASX: GW1) has been boosted by China’s NIO Inc taking a 12.16% stake plus a call option over up to 40% of the Brisbane-based company’s San Jorge lithium project in Argentina.
In a busy news day, Greenwing has also reached a new agreement with San Jorge’s vendor as well as doubled the time its chief executive officer Craig Lennon will spend at the office.
NIO — based in Shanghai and with listings on the New York, Hong Kong and Singapore stock exchanges — will pay $0.55 per new share (compared with the Friday closing price of $0.245) for a total of 21.8 million stock units, and its call option can be exercised over between 20% and 40% of the subsidiary, Andes Litio, that is earning a 100% interest of San Jorge.
The call option is exercisable within 365 days of Greenwing reporting a JORC mineral estimate for the project, that estimate to be available by the end of 2023.
NIO nails down offtake rights
San Jorge is located in Argentina’s section of the famed “lithium triangle” which also includes adjacent regions of Chile and Bolivia.
The ground covers 36,000 acres and includes the San Francisco salar.
NIO’s move is another sign that end users of lithium carbonate are firming their upstream supply chains as evidence emerges that lithium may be in a supply squeeze later this decade.
Upon exercise of its call option, NIO will have direct rights at San Jorge in proportion to its equity interest Andes Litio, but will also have the right to match any offers made by other companies for the remaining share of the project’s production.
NIO designs, develops, manufactures jointly and sells premium smart electric vehicles.
These vehicles include autonomous driving, digital technologies, electric powertrains and batteries.
Exploration licences now being transferred
Meanwhile, Greenwing has reached agreement with the vendor of the San Jorge lithium project to amend its option agreement.
The company says these changes clarify several matters including it being able to move to 100% ownership depending on investment and spending commitments.
The 15 granted exploration licences are now being transferred to Andes Litio.
As a sign of the increased activity at Greenwing, Mr Lennon will move from working two days a week to four days from next week.