The Australian-based European Lithium (Perth), whose shares are listed on the Australian Stock Exchange, agreed to acquire Ukraine’s Petro-Consulting LLC (Kyiv), which is fighting for special permits for the production of two lithium deposits in Ukraine: Shevchenkivsky and the Dobry site.
“The condition for the acquisition is the issuance of appropriate special permits for the extraction and production of lithium to Petro-Consulting (in court, through public auctions or production sharing agreements), approval of the shareholders of European Lithium (as a result of which Millstone may acquire more than 20% of European Lithium) and some other conditions, with a final date of completion of 12 months from the date of signing,” the Australian company said.
According to the report, the total purchase price is AUD20 million in shares plus another AUD50 million in shares if certain conditions are met.
Following the completion of the acquisition of European Lithium, the main project of which today is the Wolfsberg lithium project in Carinthia, Austria, Lithium Project intends to conduct the first JORC mineral resource assessment based on verification work (double drilling).
“Considering the mutual synergy due to the merger of Ukrainian projects with the advanced lithium project Wolfsberg, Millstone (the owner of Petro-Consulting) is confident in issuing special permits to Petro-Consulting and financing further exploration work and feasibility studies of Ukrainian-based projects, Millstone agreed to invest AUD20 million in European Lithium, of which AUD2.5 million immediately, AUD2.5 million subject to shareholder approval (to be requested at the forthcoming AGM) and AUD15 million subject to completion of the Petro-Consulting acquisition,” the statement said.
It states that Millstone’s representative Mykhailo Zhernov will be appointed to the board of directors of European Lithium upon completion of the first tranche of the placement.
Petro-Consulting was registered in Darnytsky district of Kyiv in April 2010. The charter capital is UAH 340,210. The ultimate beneficiary of the company is resident of Donetsk Mykhailo Zhernov, the head of the company since September 2019 is Ihor Lukyanov.
Petro-Consulting LLC (Kyiv), which early this year received a permit from the State Service of Geology and Deposits of Ukraine to produce lithium ores in the Shevchenkivske field (Velyka Novosilka district of Donetsk region) with 14 million tonnes of deposits, plans to attract a majority foreign partner for developing the field and start production in 2021. “Preliminary feasibility study shows the need to invest more than $120 million in the creation of: industrial infrastructure (electricity, gas, water supply and sewage, road construction to the railway station and the road between the mine and the dressing plant), the construction of a mine at a depth of at least 500 meters and a dressing plant,” the director of the company Ihor Kolomiyets told Interfax-Ukraine.
According to him, for the implementation of the mine construction project, a feasibility study was ordered in one of the international consulting companies.
Kolomiyets said that currently negotiations are being conducted with international investors who have experience in mining of metal ores in mines, enrichment of lithium ores at lithium dressing plants and distribution of lithium concentrate.
“Petro-Consulting has signed a letter of intent with two international companies and is negotiating the signing of the respective contracts. Investors will be attracted on the terms of their participation in the capital, as well as assistance in attracting loans. It is also planned to conclude a long-term off-take agreement,” the company’s director said, adding that one of the companies already has a similar project.
Commenting on publications in the media about the alleged connection of Petro-Consulting with People’s Deputy Ihor Kononenko, Deputy Head of the National Security and Defense Council Oleh Hladkovsky, businessman Vasyl Khmelnytsky, the director of the company categorically denied this.
