REG - European Lithium Ltd - Response to ASX Query

European LithiumAnnouncement

27/05/2020 08:00

RNS Number : 0496O
  
European Lithium Limited
  
27 May 2020
  
 

European Lithium Ltd
("European Lithium", "EUR" or "the Company")
 
Response to ASX Query
 
European Lithium Limited (ASX: EUR, FRA: PF8, VSE: ELI, NEX: EUR) (the "Company") today responded to queries from the Australian Securities Exchange ("ASX"). A copy of the responses can be seen below and the full ASX announcement can be seen at: https://www.asx.com.au/asx/share-price-research/company/EUR
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014
 For further information please contact:
 




European Lithium Ltd


+61 861 819 792




Tony Sage


info@europeanlithium.com 




NEX Corporate Adviser


+44 207 220 1666




James Joyce


 




James Sinclair-Ford


 




                                                                                                              
Capitalised terms have the meaning given in your letter.
Below are ASX's queries and EUR's responses:




1. Does EUR consider the Talaxis Agreement to be information that a reasonable person would expect to have a material effect on the price or value of its securities?




No.




2. If the answer to question 1 is "no", please advise the basis for that view.




EUR is of the view that a reasonable person would not expect the Talaxis Agreement to, at the time EUR became aware of the Talaxis Agreement, have a material effect on the price or value of its securities.
Talaxis has been engaged by the Company on a non-exclusive and best endevours basis to "assist EUR in managing and establishing commercial relationships and contract negotiations including establishing, liaising and maintaining relationships with strategic partners, such as debt and equity financiers, government / EU grant providers / financing programs, offtake partners, logistics partners, and EPCM partners and management assistance with contract negotiations on key transactions and continued support post transaction / relevant agreement".
As outlined in the Announcement, Talaxis will be remunerated in the form of a capital introduction fee on successful debt or equity raising as well as performance shares based on significant milestones relating to capital raising initiatives and market capitalisation hurdles  that need to be achieved  
At the time of releasing the Announcement, Talaxis has not successfully completed a debt or capital raising on behalf of EUR.  For this reason, EUR did not consider the Talaxis Agreement to be information that a reasonable person would expect to have a material effect on the price or value of EUR's securities. 




3. When did EUR first become aware of the Talaxis Agreement?  In answering this question, please specifically address:
3.1 When did EUR, Talaxis and their respective representatives commence negotiating the terms of the Talaxis Agreement?




Talaxis was introduced, and negotiation managed, by corporate advisory firm Empire Capital Partners (Empire).
Empire has a long-term relationship and association with both the Noble group and Talaxis.  By way of background, EUR was first in contact with Talaxis in October 2018.  In addition, EUR's Non-Executive Chairman, Mr Sage, met with Talaxis in Singapore in 2019 during a business trip.
Mr Sage, approached Empire to arrange a funding partner for EUR.  On 5 May 2020, EUR entered into a mandate with Empire in response to this request.  Empire then approached Talaxis and introduced the idea of a strategic relationship between Talaxis and EUR on or about 10 May 2020.  
Negotiations in the form of e-mails and phone/zoom calls have progressed rapidly on a daily basis since then.  




3.2 Were any agreements entered into on similar terms with Talaxis?  If so, specify the date(s) of those agreement(s).




A draft engagement letter between EUR and Talaxis dated 15 May 2020 was received and approved by the EUR Board on 19 May 2020.  However that version was not signed by either party.
EUR was provided with a revised engagement letter dated 19 May 2020 which was approved by the EUR Board on 20 May 2020, subject to satisfaction of various matters.  The engagement letter dated 19 May 2020 was subject to the receipt of various forms of documentation including onboarding survey and consents.  These conditions were satisfied in the afternoon of 22 May 2020.




3.3 When did EUR and Talaxis enter into the final Talaxis Agreement specified in the Announcement?




The final form Talaxis Agreement was subject to EUR board approval.  EUR Board approval was received on 25 May 2020.  A counter-signed copy of the Talaxis Agreement was received back from Talaxis on 26 May 2020, whilst EUR was in trading halt.




4. If EUR first became aware of the Talaxis Agreement before 27 May 2020, did EUR make any announcement prior to the relevant date which disclosed the information?
4.1 If so, please provide details.
4.2 If not, please explain why this information was not released to the market at an earlier time, commenting specifically on when you believe EUR was obliged to release the information under Listing Rules 3.1 and 3.1A and what steps EUR took to ensure that the information was released promptly and without delay.




The engagement letter dated 19 May 2020 was subject to the receipt of various forms of documentation including onboarding survey and consents.  
The outstanding information was received on 22 May 2020.  Upon receipt and review of the information received, the Company was working towards finalising the announcement ready for release for pre-market Monday 25 May 2020.
As part of the Company's multiple listings in London, Austria and Frankfurt, a copy of the draft announcement was circulated to relevant parties in each jurisdiction who manage both translation (if required) and lodgement of the announcements and would be released upon finalisation of the supporting documents.
On 24 May 2020 (i.e. prior to any information being released to ASX), the Company received an e-mail from Talaxis advising that it was standing down their authorisation of the executed engagement letter dated 19 May 2020 pending additional due diligence in respect to the engagement.
On 25 May 2020, EUR entered into a trading halt pending the announcement regarding a strategic partnership.
The final form Talaxis engagement letter was received on 25 May 2020.  A counter-signed copy of the Talaxis engagement letter  was received back from Talaxis on 26 May 2020 and subsequently announced on 27 May 2020.




5. Please confirm that EUR is complying with the Listing Rules and, in particular, Listing Rule 3.1.




EUR confirms that it is in compliance with the Listing Rules, and in particular, Listing Rule 3.1.




6. Please confirm that EUR's responses to the questions above have been authorised and approved under its published continuous disclosure policy or otherwise by its board or an officer of EUR with delegated authority from the board to respond to ASX on disclosure matters.




EUR confirms that the above responses have gone through the required Board approval process.
 
 
 
 
Regards,
 
 
----------------------------------------------
For and on behalf of the EUR Board,
Tony Sage
Non-Executive Chairman
 


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