Develop Enters Trading Halt, Pursues Essential

The start of the financial year continues to deliver news to the market thick and fast.

Develop has entered a trading halt as it looks to acquire Essential Metals. The acquisition is to executed via a binding Scheme Implementation Deed under which Develop proposes to acquire 100 per cent of the issued shares in Essential by way of a Scheme of Arrangement.

A key piece of this acquisition is Essentials, Pioneer Dome, which is located in WA’s ‘Lithium Corridor’ 130km south of Kalgoorlie. This asset has a Project Feasibility Study underway on it at the moment. Pioneer Dome is a hard rock lithium development asset with a Mineral Resource of 11.2Mt at 1.16% Li2O.

Pioneer Dome – Essential Metals

Essential Metals major shareholder Mineral Resources, has thrown its support behind the proposal. Mineral Resources also hold shares in Develop as the second largest shareholder.

The Scheme Consideration is 1 new Develop share for every 6.18 Essential shares held, implying a fully diluted equity value for Essential of ~A$152.6 million and A$0.56 per share based on the closing price for Develop shares of A$3.46 per share on 30 June 2023.

This represents a significant premium of: 34.9% to the closing Essential share price of A$0.415 per share on 30 June 2023;

30.8% to the 20-day Essential VWAP of A$0.428 per share up to and including 30 June 2023;

62.3% to the Essential share price prior to the pre-Tianqi Lithium Energy Australia (TLEA) Scheme price of A$0.345 per share on 6 January 2023 and 12.0% to the TLEA Scheme price of A$0.50 per share