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Lithium Co. Merges With Producing Critical Metals Co.

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IberAmerican Lithium Corp. announced that it has entered into a business combination agreement with Strategic Minerals Corp., a producer of critical metals. One analyst says IberAmerican is headed for a bull market.

IberAmerican Lithium Corp. (IBER:CBOE; IBRLF:OTCQB) announced that it has entered into a business combination agreement with Strategic Minerals Corp., a producer of critical metals.

Chief Executive Officer Campbell Becher told Streetwise Reports that the merger gives IberAmerican a cash-flowing asset as it continues its exploration for spodumene lithium, another metal needed for the new green economy.

Strategic is a distressed asset that was a "gift," he said. "There's a ton of opportunity here, with real low-hanging fruit solutions."

When the deal closes, Becher said his team plans to bring the mine back to steady production of tin and other metals, which could be an important catalyst for the company.

"Telling investors that you have a cash-flowing asset is a different story than telling investors you've got a drill hold that doesn't have cash flow, it's a cost center, not a revenue center," Becher said. "So, we're looking to build out some revenue centers here, as well."

IberAmerican is a hard-rock lithium exploration company focused on its 100%-owned Alberta II and Carlota properties in the Galicia region of northwest Spain, which the company said is a favorable lithium district with good infrastructure, and a proactive mining jurisdiction.

The company decided to buy the asset with the help of a world-renowned engineering firm that assessed the property. It also has engaged a well-known Spanish firm to assist in environmental, social, and governance (ESG) relations. "All IberAmerican properties will be conflict-free and at the center of the transition from the old economy to the green, sustainable, and digital new economy," the company noted in its release.

The Alberta II and Carlota properties were originally acquired in stages from Strategic, noted Technical Analyst Clive Maund. Even before the merger announcement, Maund noted that earlier work on the properties had found 11 meters of 1.24% lithium, "which is rich."

"Our goal is not done here," Becher said. "Our goal is the exploration, development, production, and consolidation of assets in Spain to build a world-class mining company."

Strategic's Penouta mine is located in the municipality of Viana do Bolo, on the central-eastern edge of the Spanish province of Ourense, and is currently the only tin, tantalum, and niobium mine in production in Europe.

The Alberta II and Carlota properties were originally acquired in stages from Strategic, noted Technical Analyst Clive Maund. Even before the merger announcement, Maund noted that earlier work on the properties had found 11 meters of 1.24% lithium, "which is rich."

IberAmerican's spodumene lithium "properties are located in the 'sweet spot' of one of the few rich lithium belts in Europe that runs from Portugal in the west through Northwestern Spain and into France," Maund wrote on March 11. "With the European Union pushing Spain to develop this belt and big markets nearby for the lithium eventually produced, the prospects for successful lithium miners in the area are bright."

Details of the Deal

The proposed combination agreement of the companies will be completed with a three-cornered amalgamation involving IberAmerican, Strategic Minerals, and IberAmerican Resources Inc., a subsidiary of IberAmerican created to complete the merger.

Under the terms of the agreement, each holder of Strategic shares will be entitled to receive one common share of IberAmerican for every seven common shares of Strategic held.

Strategic plans to call a special shareholder meeting in May to approve the transaction, which is also subject to the receipt of the stock exchange and any other required regulatory approvals.

"We are incredibly excited about the potential of this proposed transaction and, by extension, critical green asset consolidation," Becher said. "IberAmerican shareholders will gain access to a consolidated portfolio of green critical metal assets in Spain, reflecting our dedication to sustainability and positioning us at the forefront of the green economy."

The Catalyst: Mine Contains Critical Minerals

Strategic noted on its website that it extracts tin, tantalum, and niobium.

Tin is a key industrial metal used for everything from solder to alloys, including in electric vehicles (EVs). The market size for the metal is estimated at 418.4 kilotons in 2024, and it is expected to reach 475.46 kilotons by 2029, according to Mordor Intelligence, at a compound annual growth rate (CAGR) 2.59%.

"Tin is used in the electronics industry as a solder and is often used in various purities and alloys, generally with lead and indium," Mordor noted. "About 50-70% of the overall tin produced is used in the electronics and electrical industry in various products, such as mobiles, tablets, computers, watches, clocks, and other consumer electronic devices."

Tantalum and Niobium. almost always found together, are both considered technology-critical elements by the European Union.

Becher said there are other potential revenue sources from industrial minerals at the mine.

"We've got quartz, mica, and feldspar, which are all very sought after in Spain that we haven't even talked about," Becher said. "What are we going to do with those assets?"

Lithium itself is critical for the clean energy transition that is being sought worldwide. Battery storage using the element will be "pivotal" in reducing carbon footprints globally, according to Energy5. 

The market for the metal is projected to grow from US$2.5 billion in 2023 to US$6.4 billion by 2028 at a compound annual growth rate (CAGR) of 20.4% from 2023 to 2028, according to a report by Markets and Markets.

Citing demand for use in electric vehicles and storage batteries as key drivers, Katusa Research predicted the lithium market could have a major breakout this year.

"The opportunity in lithium is more electric than ever," Katusa wrote. 

Maund also pointed out that "as companies along the (Spanish) lithium belt advance their projects to production, we are likely to see a marked pickup in M&A activity."

"The conclusion is that the chart for IberAmerican Lithium points to a breakout into a new bull market soon, with the run of bullish-looking candles over the past two weeks suggesting that such a breakout may be imminent," he wrote.

streetwise book logoStreetwise Ownership Overview*

IberAmerican Lithium Corp. (IBER:NEO)

*Share Structure as of 11/20/2023

Ownership and Share Structure

Reuters provided a breakdown of the company's ownership and shareholder information, where management and insiders own approximately 13.01% of the company.

According to Reuters, Independent Director Miguel Angel de la Campa owns 5.00% of the company with 5.48 million shares, CEO Campbell Becher owns 4.18% of the company with 4.58 million shares, Chairman Eugene C. McBurney owns 3.88% of the company with 4.25 million shares, and Independent Director David Young owns 0.18% of the company with 0.20 million shares.

About 27.86% of the company is held by institutions. 

Delbrook Capital Advisors Inc. owns 17.81% of the company with 19.50 million shares, and Brockville International Holdings Ltd. owns 10.05% of the company with 11.00 million shares.

Reuters reports that there are 109.5 million shares outstanding and 84 million free float traded shares, while the company has a market cap of CA$15.33 million and trades in a 52-week range of CA$0.10 and CA$0.40.

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Important Disclosures:

  1. IberAmerican Lithiu Corp. has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of IberAmerican Lithium Corp. 
  3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
  4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Contributing Author Disclosures:

  1. Author Certification and Compensation: [Clive Maund of] is being compensated as an independent contractor by Street Smart, an affiliate of Streetwise Reports, for writing this article. Maund received his UK Technical Analysts’ Diploma in 1989.  The recommendations and opinions expressed in this content accurately reflect the personal, independent, and objective views of the author regarding any and all of the designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or views expressed. Disclosures

The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. 

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