Novonix and Lithium Energy Limited to merge natural graphite interests for IPO

Novonix Limited (ASX: $NVX) has signed a definitive agreement with Lithium Energy Limited (ASX: $LEL) to combine their natural graphite exploration interests into a new company, Axon Graphite Limited. The shares of Axon will be offered through an initial public offering (IPO) and listed on the Australian Securities Exchange (ASX). Following the planned IPO, Novonix and Lithium Energy Limited will each retain up to 28.57% ownership of Axon.

Executive commentary on the merger and IPO

Dr. Chris Burns, CEO of Novonix, stated, 'The growth opportunity in the electric vehicle and energy storage systems battery markets for anode materials and high-grade graphite products is significant over the next decade. We believe the combination of the Mt. Dromedary and Burke assets will enhance the scale and economics of these resources and provide the focus for the development of a substantial natural graphite mine and business. We believe the newly formed company of Axon to focus on the development of these assets provides the opportunity to attract new capital to enable the development of the resource and advance the production of highly refined grade natural graphite for EVs and ESS. It will also highlight the value of these assets for Novonix shareholders.' William Johnson, Executive Chairman of LEL, commented, 'This transaction involving the Mt Dromedary and the Burke Graphite Projects will allow the consolidation of two adjacent high-quality natural graphite deposits, creating a world-class inventory of high-grade natural graphite to support plans to develop an Australian-based, vertically integrated battery anode material (BAM) business. We expect significant operational synergies and economies of scale will be gained from the consolidation of these adjacent graphite deposits. We are delighted also to have Novonix as a partner in Axon Graphite. Novonix has established an enviable position within the global battery industry and their experience and industry contacts will be of great value for Axon Graphite moving forward.'

Summary of the merger and IPO announcement

Novonix Limited and Lithium Energy Limited have agreed to combine their natural graphite exploration interests into a new company, Axon Graphite Limited, which will be listed on the Australian Securities Exchange (ASX) through an initial public offering (IPO). The proposed IPO aims to raise a minimum of $15 million and up to $25 million at an issue price of $0.20 per share. The new company's principal activities will include advancing the development of graphite projects, exploring and evaluating potential projects in the battery minerals sector, and progressing the development of a vertically integrated Spherical Purified Graphite Battery Anode Material manufacturing facility in Queensland. Upon completion of the proposed IPO, Novonix and Lithium Energy Limited will each retain up to 28.57% of the shares in Axon, with the remaining shares to be held by investors in the IPO. The shares held by each company will likely be held in escrow for a period of 24 months. The merger aims to create a world-class, large-scale natural flake graphite project and realize value for the shareholders of both Novonix and Lithium Energy Limited. The proposed IPO is expected to be issued in approximately 6 to 8 weeks, and eligible Novonix and Lithium Energy Limited shareholders will be given priority in the IPO.