Shares in Sayona Mining Ltd (ASX: SYA) are in the dumps today, at one stage sinking by 13%.
At the time of writing, the Sayona share price has recovered slightly to 5.9 cents – 9.23% lower than its previous close.
It comes after the company ended a trading halt with an update on its bid for Canadian lithium producer North American Lithium Inc (NAL).
According to Sayona's release, the bid must pass through the Superior Court of Quebec's commercial division to go ahead. However, it is being contested by an alternative bidder.
Let's take a closer look at today's news from the emerging lithium producer.
Image source: Getty Images
Court battle
Sayona has entered a joint bid with Piedmont Lithium Inc (ASX: PLL) for NAL. If successful, Sayona's subsidary Sayona Québec will buy 75% of NAL while Piedmont takes home 25%.
NAL is a lithium miner with a mine and concentrator in the Val d'Or district in Québec.
In 2019, the company halted its operations and sought protection from creditors from the Québec Superior Court. The court ended its protection of NAL later in 2019 and started the process of obtaining bids for the company and its assets.
Sayona submitted its bid for NAL in February 2020. Since then, the bidding process has been pushed back several times because of COVID-19.
Sayona's joint bid is now being jointly contested by an alternative bidder and an unsecured creditor of NAL. Sayona didn't name the contesters or their grounds for contesting its joint bid.
Sayona's motion to acquire NAL was filed to the court on 11 July and a resulting preliminary hearing was held on 18 June.
There, the court scheduled the motion's substantive hearing for 28 June.
Is successful, Sayona plans to make NAL profitable once more and develop a lithium hub in Canada.
In 2018, NAL produced around 114,000 tonnes of spodumene. It had a nameplate capacity of 180,000 tonnes. With further investment, Sayona believes it also could produce battery-grade lithium carbonate.
Commentary from management
Sayona's managing director Brett Lynch said of the court process:
We are continuing to work our way through the process of acquiring NAL, as per our joint bid with Piedmont
Lithium.
We remain confident of progressing this through to successful completion and delivering the benefits of our bid for all stakeholders.
Sayona share price snapshot
Despite today's dramatic fall, the Sayona share price has been performing exceptionally well lately. It has gained 450% since the start of 2021.
The lithium company has a market capitalisation of around $328 million, with approximately 5 billion shares outstanding.
