A lithium explorer backed by Canadian mining magnate Frank Giustra dropped in Toronto trading amid speculation that its prospective buyer, a Chinese investment company, may fail to cough up the cash.
Vancouver-based Lithium X Energy Corp. fell the most in nearly two years Wednesday, the latest casualty in a sector that’s been pummeled this week on forecasts that a supply glut may loom for the metal used in electric-vehicle batteries.
In the midst of the lithium boom in December, Beijing-based NextView Capital had struck agreements with two Canadian lithium explorers — a roughly C$53 million ($41 million) deal to buy a 20 percent stake in Calgary-based Bacanora Minerals Ltd. and a few days later a C$265 million plan to acquire Lithium X, founded by Giustra’s Vancouver-based Fiore Group.
The first of those seemed to have officially toppled Wednesday as Bacanora announced that NextView had defaulted on its agreement after failing to come up with the funds and that talks had not resulted in any alternative proposals.
‘Not Pretty’
That’s spurring doubts about the Chinese buyer’s ability to come up with five times the amount to finance its acquisition of Lithium X, which holds rights to a lithium deposit in Argentina’s Salta province.
For the rest of this article: https://www.bloomberg.com/news/articles/2018-02-28/giustra-backed-lithium-x-plunges-on-doubts-about-chinese-buyer