Worth noting that ESS is trading $0.03 above the Scheme of Arrangement price. Now i'm really Muddled.

ESS up nearly 40% this morning on the announcement of a takeover offer for ESS. Happy RL shareholder

• Tianqi Lithium Energy Australia Pty Ltd (TLEA) proposes to acquire 100% of Essential Metals Limited (Essential) (ASX: ESS) by way of a Scheme of Arrangement (Scheme) detailed in a binding Scheme Implementation Agreement (SIA) signed by TLEA and Essential
• TLEA is an incorporated joint venture owned 51% by Tianqi Lithium Corporation, a global energy materials company listed on the Shenzhen and Hong Kong Stock Exchanges currently capitalised at ~US$19 billion, and 49% by IGO Limited (ASX: IGO), a mining and processing company which produces metals critical for clean energy and currently capitalised at ~A$10.5 billion. TLEA owns an integrated lithium business, including a 51% interest in the Greenbushes Lithium Operation (Albemarle Corp, 49%) and 100% of the Kwinana Lithium Hydroxide Refinery, both located in Western Australia
• The Scheme Consideration is A$0.50 in cash per ESS share, implying a fully diluted equity value for Essential of ~A$136 million
• The Scheme Consideration represents a significant premium of:

o  44.9% to the closing Essential share price of A$0.345 per share on 6 January 2023

o  45.7% to the 1-month Essential VWAP of A$0.343 per share up to and including 6 January 2023

• The Scheme is unanimously recommended by the Essential Board of Directors in the absence of a superior proposal and subject to the independent expert opining that the Scheme is in the best interests of Essential shareholders

Trading halt announced today. ESS has been on a significant SP increase the last month and especially the last ten days (could it be possible that somehow word of what was coming in this halt announcement had leaked out? heaven forbid that that ever happened).

Key points of the Halt announcement:

"Essential provides the following information in relation to this request pursuant to ASX Listing Rule 17.1:

1. The trading halt is requested by Essential for the purposes of, and in connection with, receipt of a non-binding indicative offer in relation to a potential control transaction for the Company.
2. Essential requests that the trading halt remain in place until the earlier of pre-open on the day on which either:
3. a) an announcement being made about the potential control transaction for the Company; or
4. b) the commencement of trading on 26 April 2022.
5. Essential is not aware of any reason why the trading halts should not be granted or any other information necessary to inform the market about the trading halt."

DISC: Held in my SMSF

ESS announced today it is selling out of it's Canadian lithium project to focus on its own Pioneer Dome project in WA which has shown recently to have strong potential resource. ESS currently holding around $9M is cash and this will free up capital to focus on development of Pioneer Dome. Early days but I always like to see capital and management focus following the opportunity.

Strong reaction today from the market (up 35% at time of writing) to initial assay results from the lithium exploration at Dome North...

Excellent lithium assays and widths returned from Cade Deposit

Four holes into the Cade upper zone confirm high grade tenor and broad widths from surface

KEY POINTS

• Four Reverse Circulation (RC) drill holes were completed into the upper zone of the Cade Deposit to better understand the weathering profile and evidence of lithium depletion. Pleasingly the assays are of a high lithium tenor, demonstrating that there has likely been minimal depletion of lithium near surface.

• Cade Deposit (4 RC holes) assay results include:

  • 21m @ 1.08% Li2O from surface (PDRC589)

  • 24m @ 1.29% Li2O from surface (PDRC590)

  • 15m @ 1.06% Li2O from 47m (PDRC591)

  • 26m @ 1.46% Li2O from 51m (PDRC592)

• These assays were prioritised by the laboratory, given their importance in planning the next work programmes. An ASX announcement incorporating all assays from the August drill programme is expected to be released towards the end of October.

• A diamond drill programme is currently being planned to commence in November to improve the confidence in the Dome North Resource and provide metallurgical test work samples for both the Davy and Cade Deposits.

• Steps are underway to ensure that the Dome North Resource area is ‘development ready’. This includes applying for a mining lease and conducting various environmental and hydrology studies as well as obtaining up to date capital and operating cost parameters.

  Essential Metals Managing Director, Tim Spencer, said: “These assay results once again reinforce that the Dome North area hosts a high quality Resource with the potential to be mined with minimal overburden. We now need to undertake further drilling and metallurgical test work to advance the project towards development in parallel with more exploration. We will announce the program details as soon as we can finalise the various practicalities and contractors.”