On April 12, 2018, Nemaska Lithium Inc. (TSX:NMX) announced that it entered into a USD$150 million streaming agreement (the “Streaming Agreement”) with Orion Mine Finance II LP (“Orion”). The Streaming Agreement provides for the sale and delivery to Orion of 14.5% on all lithium hydroxide and lithium carbonate produced at the Shawinigan plant and sold to third parties (collectively, “Stream Products”). Orion’s purchase price paid to Nemaska Lithium under the Streaming Agreement will be 40% of the sales proceeds of such Stream Products. Nemaska Lithium will act as Orion’s agent in the sale of the Stream Products to third-party off-takers. Through this arrangement, Orion will receive 60% of the sales proceeds from such Stream Products, which will result in Orion receiving a net portion of approximately 8.7% of the Stream Products sales. The maximum amount of Stream Products deliverable per year will not exceed the equivalent of 5,000 tonnes of refined lithium products.
In consideration of the Streaming Agreement, Orion will make an advance payment equal to USD$150 million to Nemaska Lithium Shawinigan Transformation Inc., a wholly-owned subsidiary of Nemaska Lithium. The advance payment will be released in two equal tranches of USD$75 million with the first tranche expected to be payable once the Project Financing is in place and once Nemaska Lithium has satisfied certain customary conditions which it expects to satisfy soon after the Project Financing completion. The second tranche will be payable upon the satisfaction of certain technical and other customary conditions that must be satisfied no later than December 31, 2019. In the event that these latter conditions are not satisfied, the second tranche will not be released and the percentage of Stream Products will be reduced from 14.5% to 7.5%.
On August 23, 2018, Nemaska Lithium announced that Nemaska Lithium Shawinigan Transformation Inc. has received the first payment of USD$75 million from affiliates of Orion.
Stormcrow Capital Limited acted as advisor to Nemaska Lithium and facilitated the Orion streaming transaction.
Miller Thomson advised Stormcrow Capital in this transaction with a team that included Geoff Clarke (securities and mining).