Anson Resources Receives US$330M Letter of Interest from US EXIM Bank
ASN (ASN) Share Update September 2024 Monday 23rd
Anson Resources Secures US$330M Letter of Interest from US EXIM Bank
Anson Resources Limited (ASX: ASN) has announced that its US subsidiary, A1 Lithium, has received a non-binding and conditional Letter of Interest (LoI) from the Export-Import Bank of the United States (US EXIM) for up to US$330 million in debt financing for the construction of a lithium production plant in Utah.
Instant Summary:
- Non-binding Letter of Interest from US EXIM Bank for up to US$330 million in debt financing.
- Funding aimed at constructing a lithium production plant in Utah's Paradox Basin.
- US EXIM is the official export credit agency of the US Federal Government.
- Anson Resources continues to advance its lithium projects in the Paradox Basin.
Overview of the Announcement
Anson Resources Limited (ASX: ASN) has revealed that its wholly-owned US subsidiary, A1 Lithium, has received a non-binding and conditional Letter of Interest (LoI) from the Export-Import Bank of the United States (US EXIM). The LoI proposes a debt funding package of up to US$330 million (A$500 million) for the construction of a lithium production plant in Utah's Paradox Basin.
This LoI marks a significant milestone in Anson's project funding strategy and highlights the strong engagement the company has had with the US Government and industry partners. The funding is part of the 'Make More in America' Initiative, which aims to strengthen America's supply chains.
Statements from Leadership
Anson’s Executive Chairman and CEO, Bruce Richardson, expressed delight over the LoI, emphasizing the extensive collaboration with multiple government and industry stakeholders. He noted that the Paradox Basin, believed to be the largest source of lithium in the United States, has a crucial role in developing a domestic and reliable source of critical minerals. The company's DLE technology is expected to produce one of the most environmentally friendly sources of lithium globally.
Matthew Beattie, Anson’s Chief Financial Officer, commented that the LoI reflects the potential of the Paradox Project to create high-paying jobs and stimulate regional investment. Although non-binding, the LoI is seen as an important step in advancing the project financing plan.
Conditions and Next Steps
The LoI from EXIM does not represent a financing commitment but is a preliminary step in the formal application process. The debt financing is contingent upon the satisfactory completion of due diligence, negotiation and settlement of final terms, and the negotiation of definitive documentation. There is no assurance that the debt financing will be completed as described or at all. Anson Resources will update the market upon reaching a definitive agreement with US EXIM.
About US EXIM
The Export-Import Bank of the United States is an independent Executive Branch agency with a mission to support American jobs by facilitating the export of U.S. goods and services. As of its 2023 Annual Report, EXIM has current exposure to US$34 billion in lending across 148 countries, with a default rate of 0.98%, reflecting high credit standards. EXIM's charter requires it to supplement and encourage, not displace, private capital.
The announcement of the LoI from US EXIM is a positive development for Anson Resources, potentially providing substantial funding for the Paradox Basin lithium project. This could significantly enhance the company's financial stability and accelerate project timelines. The involvement of a reputable institution like US EXIM also boosts investor confidence. However, the non-binding nature of the LoI means that the finalization of the financing is still uncertain, which could temper immediate market reactions.
Investor Reaction:
Analysts are likely to view the LoI as a positive step forward for Anson Resources. The potential for substantial funding from a reputable source like US EXIM could be seen as a validation of the project's viability and the company's strategic direction. However, the non-binding nature of the LoI means that investors will be cautious until a definitive agreement is reached.
Conclusion:
Investors should keep a close eye on further developments regarding the definitive agreement with US EXIM. The potential funding could significantly impact Anson Resources' ability to advance its Paradox Basin lithium project. Stay informed and consider the long-term potential of this strategic move.