Orocobre Agrees to Acquire Advantage Lithium February 19, 2020

Orocobre Limited (Orocobre or the Company) is pleased to announce that it has entered into a definitive agreement (the Agreement) pursuant to which Orocobre will acquire 100% of the issued and outstanding shares of Advantage Lithium Corp. (Advantage) that it does not already own.

This transaction (the Transaction) will allow Orocobre to continue to develop the Olaroz/Cauchari basin in a cost-effective manner that will optimise extraction of the resource to the benefit of shareholders, local communities, the Provincial and National governments of Argentina, and other stakeholders.

Orocobre shareholders will gain exposure to the 4.8 million tonnes (Mt) of Measured and Indicated Resources and 1.5 Mt of Inferred Resources (expressed as lithium carbonate equivalent) at Cauchari developed by the Advantage and Orocobre joint venture as detailed in the Orocobre ASX Release dated 7 March 2019.

The Transaction further consolidates Orocobre’s leading position within the region as a low-cost producer of lithium chemicals. Orocobre will also acquire Advantage’s exploration properties including those at Antofalla and Incahuasi.

Integration of Cauchari with Olaroz enables Orocobre to deliver optimal basin management and maximises the long term productive capacity of the Olaroz/Cauchari basin. The development of Cauchari will be considered within future plans for the Olaroz Lithium Facility.

The Transaction does not trigger any need for additional financing for the ongoing development of the Olaroz and Cauchari basins currently being undertaken by Orocobre and its joint venture partners.

Under the terms of the Agreement Advantage shareholders will receive 0.142 shares of Orocobre per Advantage share. Based on the closing price of Orocobre shares on the ASX of A$3.29 this equates to a value of approx. C$0.42 per Advantage share.

Orocobre is currently the largest shareholder of Advantage with 34.7% of Advantage’s issued shares.

The Transaction will be completed through a Plan of Arrangement under the Business Corporations Act (British Columbia) (the Arrangement). The Arrangement is subject to approval by the Supreme Court of British Columbia and requires approval of at least 66.66% of the votes cast by Advantage shareholders. The Arrangement also requires approval of a simple majority of the votes cast by Advantage shareholders, excluding for this purpose the votes attaching to the Advantage shares owned by Orocobre and certain other persons required to be excluded under Canadian securities laws.

If approved, the Arrangement will allow Orocobre to acquire 100% of Advantage shares that it does not already own and will see Orocobre issue approximately 15.1 million shares which in turn will increase the total issued shares of Orocobre by 5.8%. Orocobre intends to utilise its 15% placement capacity to complete the Transaction without shareholder approval.

Directors, officers, and certain key Advantage shareholders representing an aggregate of approximately 11.55% of the issued and outstanding Advantage shares have signed support agreements to vote their respective shares in favour of the Arrangement.

Orocobre Managing Director and CEO Mr. Martín Pérez de Solay commented, “The Advantage team led by David Sidoo, Callum Grant and Miguel Peral have been hugely successful in progressing the Cauchari project from exploration to pre-development and this transaction is an exciting opportunity for both Orocobre and Advantage shareholders to consolidate on the achievements to date.

For Advantage shareholders, they can now be part of something bigger without the challenges junior companies face when moving from exploration to development and onto production. For Orocobre shareholders, we will consolidate our position in the Olaroz/Cauchari basin which will give us significant flexibility as we deliver additional growth to our existing business.”

FULL ASX RELEASE: Orocobre Agrees to Acquire Advantage Lithium Corp.

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