(The Canadian Press) TORONTO, Ontario –
Canada Lithium Corp. (
TSX: T.CLQ,
Stock Forum) and
Sirocco Mining Inc. (
TSX: T.SIM,
Stock Forum) have a friendly deal to combine their businesses to pursue significant growth potential and savings opportunities.
Canada Lithium, a Toronto-based company with an advanced lithium mining project in Quebec, is offering shares worth about $120 million based on recent market prices to acquire Sirocco, an iodine producer.
Shareholders of Vancouver-based Sirocco Mining would own 42% of the combined company.
Sirocco has also agreed in a side deal to provide Canada Lithium with a bridge loan of up to $10 million. Sirocco has the option to receive repayment in Canada Lithium shares.
The friendly offer of 1.175 Canada Lithium share for each Sirocco share has a value of 48 cents, based on the closing value of Canada Lithium on Dec. 3.
Each party has agreed to pay $4.0 million to the other party under certain circumstances if the deal doesn't close.
Sirocco shares have a 52-week high and low of 89 cents and 36 cents and opened Wednesday at 38 cents. Canada Lithium has a 52-week high and low of 96 cents and 37 cents and opened Wednesday at 39 cents