Canada’s Nemaska Lithium Inc is in talks with U.S. private equity firm Orion Mine Finance Group on a lithium streaming deal, a type of specialized mining finance, according to people familiar with the transaction.
Separately, Nemaska Lithium said Thursday Japan’s SoftBank Group Corp will buy a stake of up to 9.9 percent in the company and invest up to $99.1 million (US$78 million) in a private placement.
Nemaska shares jumped as much as 20.5 percent on Friday, giving the company a market value of $566 million.
Nemaska Lithium and Orion declined to comment on the streaming deal. Sources declined to be identified as the talks are confidential.
Nemaska Lithium, which is developing a lithium mine and processing plant in Québec to meet growing demand for the material used in rechargeable batteries, said last week it was in the final stages of negotiating a US$150 million streaming transaction.
In streaming deals, financiers typically advance funding in return for a portion of the miner’s future output at a set, discounted price. This type of alternative finance has become a popular means of helping miners fund construction.
In addition to the stream transaction, Orion may also provide debt financing to Nemaska Lithium, one person said. In its financing update last week, Nemaska said it was in advanced discussions for up to US$350 million in debt financing.
Nemaska Lithium is seeking up to US$825 million for the construction, commissioning, working capital and reserve funds for its Whabouchi lithium mine and Shawinigan electrochemical plant.
Update: Québec City-based Nemaska Lithium, founded in 2007, is led by President and CEO Guy Bourassa.
(Reporting by Susan Taylor in Toronto and Nicole Mordant in Vancouver; Editing by Bernadette Baum)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Nemaska Lithium Inc