LIT and Talison Combine

Canaccord Genuity's Morning Coffee (07/16/2010)
"Celebrating with a pint of Foster's! Salares Lithium and Talison Minerals announced Thursday that they have executed a binding agreement to combine their respective lithium assets and create the world's largest, publicly traded lithium production and exploration company. Management highlighted that the merger will combine Talison's world-class lithium minerals production in Australia with Salares' prospective, large-scale lithium brines exploration project in Chile. Upon completion of the proposed transaction, the combined entity will be well-funded, allowing for immediate expansion of the producing Australian operations to run in parallel with an accelerated exploration program at the Salares brine projects. Under the terms of the proposed transaction, it is anticipated that 2.81 Salares shares will be exchanged for one Talison share. Upon completion of the Plan of Arrangement, existing Salares and Talison shareholders will own 20% and 80%, respectively, of the combined company. Based on a price of $3.50 per Talison share, the terms of the proposed transaction provide Salares shareholders with a premium of approximately 98.2% (equal to $1.25 per Salares share), based on the trailing 20-day volume weighted average price for Salares shares. Additionally, Salares will undertake a $40M private placement, which has been fully subscribed for by Resource Capital Fund, Talison's major shareholder."

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