Cadence Minerals announced a significant development in their Evergreen Lithium investment this week as the Australia-focused lithium explorer files for admission to the ASX.
Evergreen Lithium’s step towards becoming a listed company further supports Cadence’s lithium portfolio which will consist of two listed lithium plays within months.
According to the listing documents filed with the ASX, Evergreen are seeking to raise A$7m at an issue price of A$0.25. The fundraise will value Evergreen Lithium at A$45.3m – Cadence’s 8.7% stake will be worth A$3.9m.
Evergreen Lithium’s flagship project is the Bynoe Lithium Project located near the Port of Darwin in the Northern Territory Australia.
The project is adjacent to Core Lithium’s Finnis project which hosts a JORC resource of 18.9mt at 1.32% Li2O. Core Lithium’s market cap is $2.06bn.
Given the proximity Core Lithium producing Finnis lithium project, the proposed A$45.3m valuation leaves plenty of room for upside in the value in Evergreen share price, should Evergreen’s Bynoe project hold anywhere near the same grade or size of lithium resource as Finnis.
The IPO will fund an exploration programme that will focus on the EL31774 tenement, the sole license within the Bynoe project.
Cadence could possibly benefit from further milestone payment made in shares should the exploration programme prove fruitful. If Evergreen’s Bynoe project is found to host a lithium JORC resource, Cadence will receive additional shares on a tiered basis, depending on the size of the resource. The milestone are a JORC resources of 4mt, 8mt and 12mt, at a grade of not less than 1.1% lithium oxide.
Of the individual parties in line to receive additional shares should the milestones be met, Cadence Minerals is set to receive the most shares.
Cadence Minerals Lithium portfolio
The Evergreen IPO will provide Cadence Mineral’s investors with clearer visibility of the valuation of their now substantial lithium portfolio, which also includes European Metals Holdings.
European Metals Holdings operates the Cinovec project in the Czech Republic which is thought to be Europe’s largest hard rock lithium deposit.
Cadence Minerals holds a 8.1% stake in £72m market capitalised European Metals Holdings.
At current valuations, Cadence’s stakes in European Metals Holdings and Evergreen combined are worth in the region of £8m.