Volkswagen Takes Strategic Stake In Patriot Battery Metals - What's On The Cards?

Patriot Battery Metals Inc. PMETF has announced a strategic investment agreement with Germany automaker Volkswagen AG VWAGY. Through this agreement, Volkswagen Finance Luxemburg S.A. will acquire 15.55 million common shares of Patriot at C$4.42 per share.

This transaction will generate approximately C$69 million ($48 million) in gross proceeds upon closing, reflecting a 65% and 35% premium to the 30-day and 90-day volume-weighted average prices, respectively.

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.

The agreement includes a binding offtake commitment with PowerCo SE, Volkswagen’s vertically integrated battery manufacturer, under which Patriot will supply 100,000 tonnes of spodumene concentrate annually over 10 years, representing approximately 25% of Stage 1 production or 12.5% of combined Stage 1 and Stage 2 output from the Shaakichiuwaanaan Lithium Project in Québec, Canada.

The offtake bolsters PowerCo’s battery cell production in Europe and North America, including its St. Thomas, Canada facility, with a capacity of up to 90 GWh.

In addition to the investment and offtake agreement, Patriot and PowerCo have signed a Memorandum of Understanding outlining a joint commitment to pursue shared strategic objectives, including the development of a cost-effective, sustainable, and ESG-compliant battery supply chain designed to attract government support and incentives, while also exploring the potential establishment of a chemical conversion facility.

Volkswagen plans to provide additional financing for the Shaakichiuwaanaan Project after the feasibility study, securing further offtake and reinforcing their partnership to advance critical battery materials for the global clean energy transition.

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