A developing chemical company, focused on the development and mining of spodumene lithium, has entered into a streaming agreement that significantly bolster its production and operations.
Nemaska Lithium has announced that it has entered into a streaming agreement with Orion Mining Finance.
The agreement, valued at around $150 million, is part of the company’s wider financing structure to fund the construction, commissioning, working capital and reserve funds at its Whabouchi lithium mine and Shawinigan electrochemical plant.
Under the agreement, it will see the sale and delivery to Orion of 14.5% on all lithium hydroxide and lithium carbonate produced at the Shawinigan plant and sold to third parties.
Orion's purchase price paid to Nemaska Lithium under the Streaming Agreement will be 40% of the sales proceeds.
Nemaska Lithium will act as Orion's agent in the sale of the Stream Products to third-party off-takers. Through this arrangement, Orion will receive 60% of the sales proceeds from such Stream Products, which will result in Orion receiving a net portion of approximately 8.7% of the Stream Products sales. The maximum amount of Stream Products deliverable per year will not exceed the equivalent of 5,000 tonnes of refined lithium products.
"We have made solid progress in our project financing endeavours over the past couple of weeks, firstly with a private placement with SoftBank, a global technology leader, and now with the signing of this agreement with Orion, a leading and well-regarded financier in the mining industry," said Guy Bourassa, President & C.E.O. of Nemaska Lithium. "This Streaming Agreement is a financing tool which limits shareholder dilution, lowers Nemaska Lithium's cost of capital, and is under terms which are both competitive and flexible," Bourassa continued.