BELMONT, N.C. - Piedmont Lithium Inc. (NASDAQ:PLL; ASX:PLL), a significant player in the North American lithium market, has announced an amendment to its merger agreement with Sayona Mining Limited. The revision includes a new share exchange ratio and other key terms ahead of the merger aimed at creating a major lithium entity named Elevra Lithium Limited. According to InvestingPro data, Piedmont’s stock has declined over 63% in the past year, with the company maintaining a "Fair" overall financial health score of 2.25 out of 5.
Under the revised terms, Sayona will seek approval from its shareholders for a reverse stock split at a ratio of 1-for-150. If approved, the consolidation will take place before the merger’s completion. The updated exchange ratio will be 3.5133 Sayona shares for each Piedmont Lithium ordinary share, adjusted from the previously announced 527 Sayona shares per Piedmont share to reflect the consolidation. InvestingPro analysis reveals that Piedmont holds more cash than debt on its balance sheet, with a healthy current ratio of 3.7, suggesting strong short-term liquidity position. Get access to 10+ additional ProTips and comprehensive financial metrics with InvestingPro.
Each Sayona American Depository Share (ADS) issued in the merger will represent 1,500 Sayona shares pre-consolidation or 10 Sayona shares post-consolidation. Additionally, Sayona will seek shareholder approval to change the combined company’s name to Elevra Lithium Limited and update its ticker symbols on the ASX to "ELV" and on the Nasdaq to "ELVR."
The amendment also includes Sayona’s plan to seek ratification from its shareholders for the issuance of 1.25 billion Sayona shares in an equity financing that was completed in November 2024, following the signing of the merger agreement. Furthermore, Sayona will propose an increase in the total maximum aggregate Directors’ fees payable to Non-Executive Directors after the merger to reflect the larger Board composition.
Piedmont Lithium, with projects in the United States, Quebec, and Ghana, aims to become one of North America’s largest lithium hydroxide producers, supporting the transition to clean energy and U.S. energy independence.
The press release contains forward-looking statements regarding the exploration, development, and production activities of the companies involved, as well as Piedmont Lithium’s potential acquisition of an ownership interest in Ewoyaa. These statements involve risks and uncertainties, including the possibility that the companies may not be able to commercially extract mineral deposits or that the properties may not contain expected reserves. InvestingPro data indicates the company is quickly burning through cash, with negative free cash flow of $18.45 million in the last twelve months. Unlock detailed risk metrics and Fair Value analysis with an InvestingPro subscription.
The information provided is based on a press release statement and investors are cautioned not to place undue reliance on forward-looking statements, as actual results may vary from those projected. Piedmont Lithium disclaims any intent or obligation to update these statements as a result of new information or future events.
In other recent news, Piedmont Lithium Inc. and Sayona Mining Limited have announced positive results from their 2024 drilling program at the North American Lithium (NAL) mine. These results are expected to enhance the Mineral Resource Estimate and potentially increase production capacity, aligning with the global demand for lithium. In a significant development, Piedmont Lithium and Sayona Mining are set to merge into a new entity called Elevra Lithium, with the merger expected to finalize in mid-2025. The new Board of Directors will include an equal number of nominees from both companies, with Dawne Hickton appointed as Chair. The merger aims to create a major player in the lithium industry, crucial for the U.S. electric vehicle supply chain. Keith Phillips, President and CEO of Piedmont Lithium, will transition to a Strategic Advisor role post-merger. The merger is subject to shareholder approvals and regulatory sanctions. These developments indicate a strategic move towards establishing a significant, integrated lithium business in North America.
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