Lithium Power International lines up defence as Codelco circles

afr.com:

Lithium Power International, the locally listed South American explorer, has called in a defence advisor as the Chilean government’s mining group circles.

Street Talk understand Canaccord Genuity has been brought to advise Lithium Power, whose flagship Maricunga project in Chile’s golden triangle is hopeful of producing 15,200 of battery-grade lithium carbonate a year.

Lithium Power International faces a potential roadblock posed by Chile’s new national lithium strategy, which is exceedingly complicated. AP

Codelco, the Chilean government-owned copper juggernaut, has been looking for lithium acquisitions. It has hired Rothschild.

Codelco is making its move just five months after Chile announced a national lithium strategy to ramp up production of the commodity with private sector involvement to match the expected surge in demand. Santiago-based newspaper La Tercera reported Codelco, which would be at the centre of the push, had hired a bank to “negotiate alliances” in Maricunga.

One of those potential alliances is with Lithium Power.

While there’s no certainty a deal would be consummated, sources say it wouldn’t be surprising if the company fetched an eye-watering premium to its $147 million market capitalisation.

Its suitor, Codelco, is as cashed up as they come, making more than $US5 billion ($7.8 billion) in annual earnings. It recently issued $US2 billion in bonds in a deal that was heavily oversubscribed.

Should a deal eventuate, it would also help Lithium Power foot the hefty construction bill and iron out uncertainty in licensing.

As previously reported by Street Talk, Lithium Power faces a potential roadblock posed by Chile’s new policy, which is exceedingly complicated. It suggests some licences handed out