Core Lithium makes a play for Charger

Charger Metals has received an unsolicited non-binding takeover offer from Core Lithium, with the latter keen on Charger’s Bynoe lithium project in the Northern Territory.

Charger has been in discussions to explore options that could maximise shareholder value and maintain leverage to future lithium price increases. One of these discussions has led to Core Lithium’s bid to acquire Charger’s entire share capital.

Core’s proposal offers 0.9 of its shares for each Charger share, valuing the company at approximately $0.084 per share, a 23 per cent premium to Charger’s closing price on August 16.

Charger’s board has declined the offer, with the company believing the terms do not fully reflect the company’s potential. Charger remains open to further discussions with Core, while it will continue talks with other interested parties as well.

While the company is actively evaluating various strategic options, Charger emphasises that there is no guarantee of any transaction unless it aligns with shareholders’ best interests.

The Bynoe lithium project is a 70:30 joint venture with Lithium Australia which covers 63km² in a lithium-rich belt near Darwin.

Bynoe has shown promising results from recent drilling. Throughout 2023, Charger drilled three diamond and 66 reverse circulation drill holes across seven prospective areas, with results showing lithium and tantalum mineralisation at three of the targets.

There are still more than 20 identified lithium prospects within the Bynoe project that are yet to be drill tested.

The company started a strategic review last year to explore funding options for the Lake Johnston and Bynoe lithium projects.

Charger has since engaged with several potential investors and shared technical data under non-disclosure agreements, focusing on securing funding to advance exploration programs.

As part of this strategy, Charger signed a farm-in agreement in January 2024 with Rio Tinto Exploration (RTX) at Lake Johnston. Under this deal, RTX can earn a 51 per cent interest by investing $10 million in exploration, with a potential increase to 75 per cent by sole funding $40 million in exploration or completing a definitive feasibility study.