Lithium X Energy Corp (OTCMKTS:LIXXF) exploded higher last week on a jump in volume as the company provided an update on the expected completion of the previously announced plan of arrangement with NextView New Energy Lion Hong Kong Limited. This is a follow-on update to the M&A deal hinted back in December when the company announced that it had entered into a definitive agreement, pursuant to which NextView New Energy Lion Hong Kong Limited has agreed to acquire all of the issued and outstanding common shares and warrants of Lithium X.
Shares of the stock have been all over the place in the interim, which lets you know that any arbitrage players started to seriously doubt the deal would close. The latest update puts most of that doubt to rest. The company is a player in the lithium space, which is a core play in the electric vehicle theme, as most traders are aware at this point. But, nonetheless, let’s take a top down look at the company for those still unfamiliar with the name.
Lithium X Energy Corp (OTCMKTS:LIXXF) trumpets itself as a company that operates as a lithium exploration and development company in Argentina and the United States.
As noted, LIXXF owns a 50% interest in the Sal de los Angeles project comprising 8,156 hectares located in Salta Province, Argentina. It also owns a 100% interest in the Clayton Valley South project consisting of 477 federal placer mining claims covering approximately 9,540 acres located to the southwest of Tonopah, Nevada; and holds an option to acquire a 100% interest in the NSP Lithium claims covering approximately 5,480 acres located in northern Clayton Valley, Nevada.
Lithium X holds option agreements on 15,020 acres (6,078 hectares) in Nevada’s Clayton Valley and land positions both north and south of Albemarle’s Silver Peak lithium brine mine, North America’s only lithium producer, making the Company the largest claim holder in the Clayton Valley. Clayton Valley North covers approximately 5,480 acres (2,217 hectares) in northern Clayton Valley, Nevada. The claims are contiguous to private lands and placer claims belonging to the lithium production facility of Albemarle Corporation. Historic drill information and a geophysical survey show the property covers basin-fill sediments which are similar to the sediments currently producing lithium brines. Two Albemarle production sized wells lie along the boundary. The Company has also acquired the Clayton Valley South Expansion (“Clayton Valley South”), totaling approximately 9,540 acres (3,861 hectares). The property is strategically located contiguous to the Silver Peak lithium mine operated by Albemarle Corp. on the northern boundary, the Clayton Valley South project operated by Pure Energy Minerals Ltd to the east and the Neptune property owned by Nevada Sunrise Gold Corporation to the west.
The company was formerly known as Royce Resources Corp. and changed its name to Lithium X Energy Corp. in November 2015. Lithium X Energy Corp. was founded in 1997 and is headquartered in Vancouver, Canada.
Find out when $LIXXF stock reaches critical levels. Subscribe to OracleDispatch.com Right Now by entering your Email in the box below.
As noted above, this M&A deal has been in the works for a few months, but recently fell into doubt as market participants apparently began to question the purchaser’s ability to pony up sufficient capital to meet its obligations with respect to the deal. However, that all came to a close during the action last week.
According to the release, “the Company has been advised by NextView that it has completed its financing arrangements and has wired the funds required to complete the Arrangement to the depositary. All conditions to completion of the Arrangement capable of being satisfied prior to closing have been satisfied and, subject to the satisfaction of the remaining customary conditions to be satisfied at closing (the depositary’s receipt of funds, accuracy of representations and warranties, compliance with covenants, etc.) the Company expects the closing to occur on Friday March 9 and for the Effective Time of the Arrangement to be 12:01 am on Saturday March 10.”
Also of interest, the company continued on in the release to note that “Key executives and other insiders of the Company have indicated that, since they are not currently in possession of any undisclosed material information, they are able to, and intend to, purchase the Company’s common shares on the open market should a discount to the consideration payable under the Arrangement continue to prevail.” That message itself provides some further support to shares.
Now commanding a market cap of $170.1M, LIXXF has a significant war chest ($12.9M) of cash on the books, which compares with virtually no total current liabilities. The company is pre-revenue at this point. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $LIXXF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $LIXXF, either long or short, and we have not been compensated for this article.