Canada-based lithium developer Patriot Battery Metals (PMET.V), said on Tuesday Albemarle (ALB.N) would invest C$109 million ($82.6 million) for an around 5% stake in the company, sending its Australia-listed shares up nearly 21%.
Albemarle, the world's biggest lithium producer, is acquiring the stake in Patriot just as the Canadian company estimated its Corvette resource as the biggest hardrock lithium deposit in the Americas.
The stake acquisition will help Albemarle shore up supply of the raw material used to make electric vehicle batteries as it readies to gain from the growing U.S. automobile market.
Patriot also agreed to study with Albemarle the viability of a downstream lithium hydroxide plant integrated with its Corvette deposit.
The battery metals miner on Monday announced the first mineral resource estimate for spodumene pegmatite at Corvette, which showed deposits of 109.2 million tonnes of lithium oxide.
"As maiden resource, to come out with 100 million tonnes is a very good outcome. It's a very good discovery and they still have potential to grow," said Reg Spencer, a mining analyst at Canaccord Genuity.
Albemarle will subscribe to about 7.1 million Patriot shares for C$15.29 apiece, a near 7% premium to the stock's July 31 closing price on the TSX Venture Exchange.
Patriot, which expects the investment to close by Aug. 4, will use the proceeds to accelerate development activities at Corvette and for general corporate purposes.
"The additional funding will allow us to more aggressively advance the Corvette Property through drilling, permitting, study work and more," Patriot Chief Executive Blair Way said.
Patriot's Australia-listed shares jumped as much as 20.7% to A$1.823 by 0053 GMT, posting their biggest intraday percentage gain since March 28.
($1 = 1.3189 Canadian dollars)
