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I’ve been reading this Sokoman Minerals Corp (TSXV: SIC) (OTCQB: SICNF) press release: Piedmont Lithium Inc. Enters into Definitive Agreements with Sokoman and Benton to Acquire an Interest in the Killick Lithium Project
This is my understanding:
Piedmont Lithium Inc. is a development stage company advancing an integrated lithium business. They trade on NASDAQ, (PLL) with 19,195,889 shares issued, currently trading at USD$28.68. On September 30, 2023, they had USD$95 million in cash.
Piedmont’s primary projects are:
Carolina Lithium: Proposed mine, with spodumene concentrator, and lithium hydroxide conversion plant. Expected to produce 30,000 MT of lithium hydroxide per year in 2027.
Ghana: Atlantic Lithium, in partnership with Piedmont, is working toward having the Ewoyaa Lithium Project produce spodumene concentrate in 2025.
Tennessee Lithium: A world-class lithium hydroxide production facility, the plant is expected to produce 30,000 MT of lithium hydroxide per year (a third of U.S. production) in 2026.
Quebec: North American Lithium successfully restarted production and began delivering commercial shipments of spodumene concentrate in 2023. It is the only major source of new spodumene production expected to come online in North America in the near term.
Vinland Lithium Inc. has been formed and the former Sokoman Minerals Corp. and Benton Resources Inc. joint venture Golden Hope property, renamed the Killick Project, was transferred to its 100%-owned “subco” Killick Lithium Inc. which granted a 2% NSR in favor of Sokoman and Benton.
Piedmont invested CAD$2 million to hold 19.9% of Vinland. With 10 million shares issued in Vinland, the implied value is CAD$10 million. Vinland will do an IPO to the TSX Venture Exchange, allowing the market to set the value of the Company.
Piedmont will advance up to CAD$12 million in exploration funds to Killick in three stages, increasing its ownership of Killick up to 62.5% interest. At each stage, Piedmont will issue common shares to Sokoman and Benton to an ultimate value of CAD$10 million.
At the end of all of this Sokoman ends up with:
Exactly the right partner for advancing the Killick Project.
Offtake agreement on 100% of future Lithium production by an end processor.
The ability to continue exploring for Lithium with CAD$12 million in costs fully funded and no share dilution.
Four million common shares of Vinland Lithium Inc. (CAD$4 million value) trading on TSXV.
CAD$5 million of value, in Piedmont common shares. Piedmont shares are trading at a low price. If the price of PLL returns to its former highs, over $60, the value of the block held by Sokoman will increase proportionally.
18.75% interest in Killick Lithium and the Killick Project, post earn-in. This may be subject to dilution depending on the funding of work beyond the earn-in phase.
A 1% NSR on the Killick property, potentially generating future income of +USD$6 million/year should Piedmont move the property to production.
The ability to focus on exploring its primary gold projects.
The foregoing 8 points of value will accrue to the benefit of Sokoman and are not properly reflected in the current share price.
By: Stephen Mlot, P.Eng. Mining Analyst and Technical Writer CHF Capital Markets
An investor in mining companies for more than 40 years, with a preference for gold, Stephen has more than 45 years Mineral Industry experience, including 25 years of Management and Board service with junior mining companies. He is experienced in the full life cycle of Mining projects, from grass roots exploration, through resource building, financial evaluation, construction, and development, mine operations and closure. He is a Qualified Person for NI 43-101 reporting and is skilled at gold mining project valuations at all stages.
Disclaimer
CHF Capital Markets has prepared this blog for general information purposes only. This document should not be considered a solicitation to buy or sell securities in the companies discussed herein. The information provided has been derived from sources believed to be reliable, but cannot be guaranteed. This blog does not take into account the recipients’ investment criteria, financial condition, or financial goals of individual recipients and other issues such as jurisdictional issues and/or legal restrictions that may exist for certain persons. Recipients should rely on their own due diligence and take their own professional advice before investing.
Compensation for this article came from our monthly fees. CHF Capital Markets Inc. and partners Ottavio Cavalcanti and Cathy Hume own shares of SIC.
Disclaimer
CHF Capital Markets has prepared this blog for general information purposes only. This document should not be considered a solicitation to buy or sell securities in the companies discussed herein. The information provided has been derived from sources believed to be reliable, but cannot be guaranteed. This blog does not take into account the recipients’ investment criteria, financial condition, or financial goals of individual recipients and other issues such as jurisdictional issues and/or legal restrictions that may exist for certain persons. Recipients should rely on their own due diligence and take their own professional advice before investing.
Compensation for this article came from our monthly fees. CHF Capital Markets Inc. and partners Ottavio Cavalcanti and Cathy Hume own shares of SIC.
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