Bearing Resources Ltd. and Li3 Energy Inc. entered a definitive agreement to merge, with Li3 Energy to become a wholly owned Bearing subsidiary.
Li3 Energy's main assets include the Maricunga lithium property in Chile. Upon completion of the merger, Bearing will have an undivided 17.7% interest in the project.
The companies signed a letter of intent late November 2016 regarding the deal. Earlier that month, Wealth Minerals Ltd. had decided not to proceed with an agreement to acquire Li3 Energy after completing due diligence.
Under the definitive agreement, Bearing will form a new subsidiary to merge with Li3 Energy, according to Jan. 31 statements from the companies.
Each share of Li3 Energy common stock will be converted into the right to receive common shares of Bearing, with a total of 16 million Bearing common shares to be issued.
The Bearing shares to be received by Li3 Energy stockholders will represent 43% of the issued and outstanding shares of the combined company upon completion of the merger.
The deal is subject to various conditions, including approval from the TSX Venture Exchange.