Patriot Battery Metals Inc. (PMETF), a Canadian lithium exploration company specializing in hard-rock sources, has announced a new partnership with Volkswagen AG (VKW.L, VLKAF.PK, VOW.BE). On Wednesday, Patriot revealed they have signed a subscription agreement with the German automotive giant to sell approximately 15.557 million shares at a price of C$4.42 each. This transaction is anticipated to generate gross proceeds of approximately C$69 million, which will be paid in U.S. Dollars amounting to $48 million at closing.
Under the terms of the agreement, Patriot Battery Metals will establish binding offtake commitments with Volkswagen's wholly-owned battery manufacturing subsidiary, PowerCo SE. This will involve the annual supply of one million tonnes of spodumene concentrate over a decade. The supplied spodumene concentrate will support PowerCo’s battery cell production operations in Europe and North America, notably including its facility in St. Thomas, Canada.
The supplied quantity is expected to be approximately 25% of the projected output from Patriot's Shaakichiuwaanaan Lithium Project located in Québec, Canada.
The funds raised from this agreement are earmarked for the ongoing exploration and development of the Shaakichiuwaanaan project. Additionally, they will contribute towards the completion of a feasibility study and will be allocated for general corporate purposes and working capital. The deal is anticipated to close by mid-January 2025.
The share subscription price presents a significant premium—65% over the 30-day average and 35% over the 90-day average trading prices on the Toronto Stock Exchange as of December 17.
After the closing of this transaction, Volkswagen is expected to own approximately 9.9% of Patriot Battery Metals' shares on a pro forma non-diluted basis, and will also be granted certain rights as part of their investment.
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