China’s Chengxin Lithium increases stake in Canadian junior Lithium Chile to 19.9% 

Chengxin Lithium, a Chinese public company, will increase its stake in Lithium Chile (TSXV: LITH; US-OTC: LTMCF) to 19.86%, up from 5%, as the Calgary-based miner plans to complete a private placement of 29.3 million shares for $27.9 million. 

The Chinese company will also be able to nominate two directors at the board of Lithium Chile. Chengxin has also agreed to help the company in exploration and development of its properties in Chile, Lithium Chile said.  

“I think this is a game changer for Lithium Chile,” Steve Cochrane, the company’s CEO told The Northern Miner. “With this investment…Lithium Chile will have approximately $45 million dollars in the bank. This removes the need for any financing for the foreseeable future and gives us a lot of financial flexibility.”

“Secondly Chengxin expertise as the second largest lithium processor in China will be immensely beneficial to us,” he added.   

With a market capitalization of $9 billion, Chengxin is in the business of producing spodumene and brines as well as manufacturing lithium products, including lithium hydroxide and lithium carbonate. The company recently announced a strategic co-operation agreement with BYD, China’s largest electric carmaker.  

Currently, Chengxin has 70,000 tonnes of lithium product capacity and ranks second in China, with another 60,000 tonnes capacity under construction in Indonesia, said Lithium Chile.  

Cochrane described Chengxin as “a well-respected leader in the lithium space” and that the company’s experience would be valuable for Lithium Chile.   

Lithium Chile has a lithium property portfolio covering 692 sq. km. in Chile and 233 sq. km. in Argentina. Its priority lithium projects include the Laguna Blanca, Coipasa, and Los Morros, all of which are early stage projects located in Chile.  

At presstime in Toronto, Lithium Chile was trading at $1.09 per share within a 52-week trading range of 26¢ and $1.29. The company has 160.4 million common shares outstanding for a market cap of $174.8 million.