The Lithium Power International Ltd (ASX: LPI) share price hit its 52-week high of 61 cents shortly after opening this morning on the back of a company update.
The Lithium Power share price has since settled at 59.5 cents, up 2.59% at the time of writing.
The price movement comes as the miner announced plans to demerge from its Western Australian lithium assets.
Let's take a closer look…
Lithium demerger
Lithium Power has announced it will spin-out both its Greenbushes and Pilgangoora hard rock lithium assets in WA.
Instead, these interests will be held by DemergeCo, a wholly-owned subsidiary of Lithium Power, which will now seek to be listed on the ASX.
Lithium Power has announced its shareholders will receive DemergeCo shares on a pro-rata basis via a capital reduction and in-specie distribution, subject to both shareholder and regulatory approvals.
The company now intends to focus on its Maricunga Lithium Brine Project in northern Chile.
Just last week, Lithium Power reported positive advancements and surveying of its WA projects.
The sites are located immediately along strike from the major Talison lithium mine and adjacent to the assets owned by Pilbara Minerals Ltd (ASX: PLS).
What does the company say?
Lithium Power reasons the split will unlock the "strategic value" of the assets and leave the company to focus on developing its flagship site within Chile's so-called 'Lithium Triangle'.
The board believes the decision will compensate existing shareholders, in that it will give "the opportunity to create long term value via a new ASX-listed company" and will allow a "direct level of participation" in these assets.
Lithium Power CEO Cristobal Garcia-Huidobro said:
LPI has a number of highly prospective assets located in WA that are at an exciting stage of exploration.
These assets deserve their own time, attention and resources, and LPI's Board believes that it is the best outcome for LPI shareholders to create a dedicated, WA-focused company that has the technical, human and financial resources to advance these exciting assets.
Lithium Power share price snapshot
The Lithium Power share price has skyrocketed in the last 12 months, up 143%.
The company hit its previous 52-week-high of 60 cents a share on Monday, before breaking through the 60 cents barrier in reaching its new high this morning.
The company has a market capitalisation of $208 million.
