IberAmerican Lithium Corp.'s (IBER:CBOE; IBRLF:OTCQB) proposed acquisition of Strategic Minerals Europe Corp. just received approval by the latter company's shareholders, according to a news release.
"This resounding vote of confidence reaffirms our vision for IberAmerican's future and underscores the synergies and opportunities that lie ahead," IberAmerican Chief Executive Officer Campbell Becher said in the release. "We eagerly anticipate closing the transaction as soon as possible and are committed to delivering long-term value for our current and future stakeholders."
In the deal, the outstanding common shares of Strategic Minerals will be exchanged for common shares of IberAmerican, one IberAmerican share for every seven Strategic shares held, the release explained.
Referencing the imminent company merger, Future Money Trends wrote on May 28, "IberAmerican is slated to purchase the Penouta tin mine, the largest in Europe," and described the project as a "crown jewel asset." As well as tin, production from Penouta also includes tantalum and niobium, three crucial metals to the decarbonization and the green energy transition happening around the world, Strategic Minerals said.
Once the Canadian lithium explorer assumes ownership of Penouta, it intends to immediately resume production there, specifically in Section B, then reactivate operations in Section C later this year, reported Streetwise Reports last month.
100%-Owned Projects on Same Belt
Penouta is in northwestern Spain in Galicia, the same mining-friendly region in which IberAmerican's two existing, adjacent lithium projects Alberta II and Carlota are located. Late last year, IberAmerican acquired the remaining 30% of these assets from Strategic Minerals for CA$1 million (CA$1M), thereby gaining complete control of them, Becher explained in an interview. IberAmerican previously had purchased and held the other 70%.
"Drawing on some of the previous work that had been done [at Alberta II], what really got us excited was 11 meters of 1.24% lithium," Becher told Thomas Warner of Proactive Investors. "We've got roughly 16 kilometers of strike, and we're right in the sweetheart area."
The Alberta II and Carlota properties are on the Iberian Pegmatite Belt, extending from Portugal to Ireland by way of Spain and France and comprising a newly recognized spodumene district, of which Europe has few. (Spodumene ore is the most economically viable source of lithium, the company said.)
IberAmerican CEO Becher noted that the European Union (EU) is pushing to develop this lithium belt in Spain and Portugal. For instance, four gigafactories are planned for Spain, which will make it one of the largest lithium battery providers in Europe. Also, electric vehicle production in the country, the EU's second largest automobile manufacturer, is expanding rapidly.
The area could become a centralized hub of lithium mining, added Becher, noting two projects owned by other operators are located on the belt, too. One is Savannah Resources Plc's development-stage Barroso in Portugal, with a confirmed resource of 120 million tons of 1.06% lithium. The other is Energy Transition Metals Ltd.'s exploration-stage Villasrubias in Spain.
Relative to the market cap of these two companies, Becher said, "From a value point of view, with us just going public and trading at roughly a CA$20M market cap, I think you can see there's a lot of room for this to run."
Owning Alberta II and Carlota outright allowed IberAmerican to raise US$9.1M in an oversubscribed US$7M financing, Becher said.
"I think that was actually more or less a litmus test for the validity of the project," he added.
IberAmerican's ultimate goal, indicated Becher, is to take Alberta II into production and do so as quickly as possible. The plan going forward is to prove the resource there and then move directly to completing a preliminary economic assessment.
Lithium, Tin Markets Experiencing Growth
As for lithium, global demand for the critical metal is projected to continue its steady rise, starting in 2020, to at least 2035, Statista data show. By then, demand will have reached an estimated 3,829,000 metric tons of lithium carbonate equivalent, a 317.5% increase over demand in 2023 of 917,000 metric tons.
Looking forward, the lithium market is projected to expand at a 20.4% compound annual growth rate (CAGR) to US$6.4 billion (US$6.4B) by 2028 from US$2.5B in 2023, according to Markets and Markets.
"Investors are going to need the best lithium stocks in their portfolio so that they can capitalize on the growing prices that growing demand is going to bring with it," Jason Williams, managing editor of Wealth Daily newsletter, wrote on May 2.
With respect to tin, the market is expected to also experience consistent growth in the coming years, according to Kings Research. The market, valued at US$6.863B last year, is forecasted to hit US$9.291B by 2031, reflecting a CAGR of 3.91%.
"Technological advancements in electronics are impelling the demand for tin in soldering applications, particularly with the proliferation of electronic devices and the growth of sectors such as electric vehicles and renewable energy systems," the report said.
Future Money Trends pointed out that "the strong growth is coming from electric and autonomous vehicles, artificial intelligence (ChatGPT), 5G and the Internet."
A handful of countries, including China, Indonesia, Myanmar and Peru, produce most of the world's tin, noted Kings Research.
Several Stock-Moving Events Ahead
Upcoming catalysts for IberAmerican include closing its Strategic Minerals acquisition, restarting production at Penouta and updating the Alberta II resource estimate.
Based on IberAmerican's fundamentals and technicals, Technical Analyst Clive Maund has a favorable outlook for the company's stock, he wrote in an April report. He indicated then that he planned to stay long in it.
Maund expected the news at the time, including the plan to resume mining at Penouta, the proposed merger with Strategic Minerals and vertical integration with its wholly owned subsidiary, to propel the stock to break through the resistance at about CA$0.17 per share, he wrote.
Since then, the share price did just that, on a 59% upleg to its current price.
Ownership and Share Structure
Reuters reports the ownership of IberAmerican to be as follows. Six strategic entities own 23.43%, or 25.65 million (25.65M), shares of the company. These investors, listed from most to least shares held, are Brockville International Holdings Ltd. with 10.05% or 11M shares, Miguel de la Campa with 5% or 5.48M shares, CEO Campbell Becher with 4.18% or 4.58M shares, Chairman Gene McBurney with 3.88% or 4.25M shares, Director David Young with 0.18% or 0.2M shares and Director Serafino Iacono with 0.14% or 0.15M shares.
As for institutional ownership, three firms together hold 21.46% or 23.5M shares. They are Delbrook Capital Advisors Inc. with 17.81% or 19.5M shares, CI Global Asset Management with 2.74% or 3M shares and U.S. Global Investors Inc. with 0.91% or 1M shares.
Retail investor own the remaining 55.11% of the metals explorer.
In terms of share structure, IberAmerican company has 109.5M outstanding shares and 83.85M free float traded shares.
The company has a market cap of CA$18.96M and has traded over the past 52 weeks between CA$0.07 and CA$0.215 per share.
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