Patriot Battery Metals enters into subscription agreement with Volkswagen
by CM Staff
The proceeds from the Strategic Investment will be used for exploration, development and completion of a feasibility study on the Shaakichiuwaanaan Project, as well as for general and working capital purposes.
VANCOUVER — Patriot Battery Metals Inc. announces that it has entered into a subscription agreement with Germany’s largest car manufacturer, Volkswagen, providing for the issue and sale to Volkswagen of 15,557,500 Common Shares at an price of C$4.42 per share, for aggregate gross proceeds of approximately C$69 million to be paid on closing in U.S. Dollars in the amount of US$48 million.
Upon closing of the Strategic Investment, Volkswagen will own approximately 9.9% of Patriot’s issued and outstanding Common Shares on a pro forma non-diluted basis and will be granted certain rights pursuant to an investor rights agreement to be entered into between Volkswagen and the Company.
The proceeds from the Strategic Investment will be used for exploration, development and completion of a feasibility study on the Shaakichiuwaanaan Project, as well as for general and working capital purposes.
As part of the Strategic Investment, Patriot will enter into a binding offtake term sheet with Volkswagen’s wholly-owned and vertically integrated battery manufacturer, PowerCo, for Patriot to supply 100,000 tonnes of spodumene concentrate (SC 5.5 target) per year over a 10-year term.
Patriot says that the Offtake is expected to supply PowerCo’s cell production activities in Europe and North America, including its battery cell factory in St. Thomas, Canada. St. Thomas is intended to become PowerCo’s largest cell factory with a production capacity of up to 90 GWh. Building a North American EV supply chain, from raw materials supply to the construction and operation of Gigafactories, is part of PowerCo’s mission.
Ken Brinsden, Patriot’s President, CEO & Managing Director, said: “We welcome Volkswagen and PowerCo as our strategic partner. This is a pivotal milestone for Patriot as we bring in a long-term strategic partner who is already a major participant in the European and North American battery supply chain as the first customer of the globally significant Shaakichiuwaanaan Project. This investment is consistent with our long-term strategy for Patriot to become a global lithium leader and a key supplier of lithium raw materials to the emerging North American and European battery materials supply chains.”
Thomas Schmall, Volkswagen Group Board Member for Technology, said: “This investment represents a significant milestone in our journey toward a fully electric future. By collaborating with Patriot Battery Metals, we are not only securing key raw materials for cutting-edge sustainable battery technology but also reinforcing our commitment to North America. Together with partners, we are building a dedicated e-mobility ecosystem in North America, ranging from battery technology to software and specific vehicle architectures.”
Jörg Teichmann, Chief Procurement Officer of PowerCo, said: “This is an important milestone to becoming one of the leading providers of outstanding battery technology. At the same time, it enables us to fulfil our aspiration of covering relevant steps along the entire value chain – from sourcing of raw materials to the operation of gigafactories. We are very pleased to have found such a partner in Patriot and to support the team in becoming one of the global lithium leaders and key supplier of lithium raw materials to the emerging North American and European battery materials supply chains.”
The parties intend to replace the Offtake term sheet with a more comprehensive offtake agreement following completion of the feasibility study. If a comprehensive offtake agreement has not been entered into within 90 days of the feasibility study (or a later date as agreed by the parties), the binding Offtake term sheet will continue to apply.
As part of the Strategic Investment, Patriot and PowerCo have entered into a non-binding and non-exclusive MoU to be effective on closing of the Strategic Investment for a 24 month term.
