LG

■ LG Energy Solution (“LGES”) to invest A$20M in GT1 equity at A$0.92 per share, to become a substantial shareholder and represents a 28% premium to GT1’s 90- day VWAP
 
■ The investment to validate GT1’s Seymour project and the company’s strategy to become North America’s leading lithium producer
 
■ Offtake Term Sheet provides that GT1 will sell 25% of Seymour Project offtake to LGES for 5 years, establishing a stable critical mineral supply chain in North America
 
■ Funds to be used in advancing GT1’s Flagship Seymour Lithium Project
 
 
SEOUL, May 19, 2023 – LG Energy Solution (LGES; KRX: 373220), a leading global lithium[1]ion battery manufacturer, and Green Technology Metals Limited (GT1; ASX: GT1), a North America-focused multi-asset lithium business, today signed an equity subscription agreement and an offtake term sheet in relation to future production from GT1’s flagship Seymour Project in North America.
 
Under the Subscription Agreement, LGES will subscribe for 21,739,130 new shares in GT1 at a price of A$0.92 per share, for total proceeds of A$20M. The subscription price is at a material premium to recent trading in GT1, recognizing the strategic nature of the investment into GT1 and associated offtake rights, and represents 7.89% of GT1’s ordinary shares on issue. The issue price of A$0.92 per share represents a 28% premium to the 90-day VWAP at close on May 18, 2023.The Subscription Agreement has been executed following the completion of detailed confirmatory financial and legal due diligence on GT1 and its projects by LGES.
 
Pursuant to the Offtake Term Sheet, GT1 will sell to LGES 25% of its spodumene concentrate production from Seymour for a period of 5 years from the commencement of commercial production at Seymour. In the event that GT1 develops a lithium hydroxide conversion facility during this period, GT1 will deliver the equivalent lithia content to LGES in the form of lithium hydroxide. The pricing for both spodumene and lithium hydroxide has been agreed based on a formula linked to the prevailing market price of lithium hydroxide. The parties have agreed to enter into a full form Offtake Agreement consistent with the terms outlined in the Offtake Term Sheet by August 2023.
 
The funds received will be used to continue the rapid progression of Seymour through exploration and feasibility. The Preliminary Economic Assessment (PEA) remains underway and is now expected to be finalized and announced in the coming weeks.
 
The agreement marks a new extension of LGES’s continued efforts to establish a critical mineral supply chain in North America. The company’s production capacity in the region will eventually reach approximately 300GWh, representing the largest share of its global 2 production network, and thus LGES has been proactively engaging in opportunities to secure a stable local supply chain to produce its battery products in scale and with speed.
 
“We have always been committed to expanding our supply chain in North America, as a steady supply of critical minerals, including lithium, is key to ensuring reliable and timely delivery of our innovative power solutions to our customers,” said Myung Hwan Kim, Chief Procurement Officer of LG Energy Solution. “Thanks to partnerships with competent local suppliers like GT1, we will continue our devotion to expediting the EV transition in North America, through our product competitiveness and operational excellence.”
 
“We welcome the execution of these important agreements with LGES and look forward to their contribution as a new strategic partner with GT1, alongside AMCI, Lithium Americas and Primero. LGES brings global scale and expertise in battery manufacturing as well as balance sheet strength as GT1 rapidly advances its integrated lithium strategy in North America,” said John Young, Chairman of Green Technology Metals.