Acquisition Strengthens Pilbaras Position As A Global Lithium Powerhouse

Pilbara Minerals to Acquire Latin Resources for A$369 Million

Acquisition Strengthens Pilbara's Position as a Global Lithium Powerhouse

Transaction Expected to Close in Q4 2024

Australian lithium miner Pilbara Minerals (ASX: PLX) announced on Thursday that it would acquire its smaller peer, Latin Resources (ASX: LRS), for an implied value of A$369 million. The acquisition is expected to close in the fourth quarter of 2024, subject to regulatory approvals.

Strategic Rationale for the Acquisition

The acquisition of Latin Resources will significantly strengthen Pilbara Minerals' position as a global lithium powerhouse. Latin Resources holds a portfolio of high-quality lithium projects in Western Australia, including the world-class Wodgina project.

The Wodgina project is one of the largest and highest-grade lithium projects in the world. It has a total resource of 258 million tonnes of ore, with an average grade of 1.1% lithium oxide. The project is currently under development, with first production expected in 2026.

Benefits of the Acquisition for Pilbara Minerals

The acquisition of Latin Resources will provide Pilbara Minerals with the following benefits:

• Increased production capacity: The Wodgina project will significantly increase Pilbara Minerals' production capacity, making it one of the largest lithium producers in the world.
• Diversified portfolio: The acquisition of Latin Resources will diversify Pilbara Minerals' portfolio of lithium projects, reducing its exposure to any one project.
• Enhanced competitive position: The acquisition will strengthen Pilbara Minerals' competitive position in the global lithium market.

Impact on Latin Resources Shareholders

Latin Resources shareholders will receive 0.885 Pilbara Minerals shares for each Latin Resources share they hold. The transaction implies a value of A$0.188 per Latin Resources share, a premium of approximately 56% to the closing price on August 14, 2024.

Conclusion

The acquisition of Latin Resources is a significant step for Pilbara Minerals as it seeks to become a global lithium leader. The transaction will provide Pilbara Minerals with increased production capacity, a diversified portfolio, and an enhanced competitive position.