Investor sentiment surged in the pre-market session as shares of Lifezone Metals Limited (NYSE: LZM) rose over 10%, reaching $4.90 as of the latest check. This sharp upward movement follows a strategic acquisition that positions the company at the forefront of a major nickel development.
Lifezone has finalized a definitive agreement with BHP Billiton (UK) DDS Limited to acquire BHP’s 17% equity stake in Kabanga Nickel Limited (KNL), thereby assuming full ownership of KNL.
Enhanced Ownership Structure and Offtake Control
With this acquisition, Lifezone Metals now owns 100% of KNL, which in turn holds an 84% interest in Tembo Nickel Corporation Limited (TNCL), the operating entity for the Kabanga Nickel Project in northwestern Tanzania. The Government of Tanzania retains the remaining 16% in TNCL.
The agreement also terminates all prior contractual arrangements with BHP, including the T2 Option Agreement. Lifezone now controls 100% of the project’s offtake, aligning commercial, technical, and ESG interests under a unified management structure.
Transaction Terms and Deferred Payments
Key terms include an initial fixed cash payment of $10 million, due within 30 days of either: (i) 12 months post-Final Investment Decision (FID) or (ii) after Lifezone secures $250 million in cumulative funding. An additional deferred payment will be made 12 months following first commercial production, indexed to Lifezone’s share price performance.
This second payment ranges up to $83 million, with a reduction to $75 million if a Resettlement Action Plan (RAP) Trigger Event occurs. Moreover, BHP has committed to a 12-month lock-up of its Lifezone shares, and any post-lock-up divestitures must first be offered to Lifezone.
Next Steps: Financing and Strategic Partnerships
The acquisition marks a transformative milestone for Lifezone as it advances the Kabanga project toward FID. BHP’s exit comes as the project transitions into development, with Lifezone emphasizing value creation for all stakeholders, including Tanzania and local communities.
Standard Chartered Bank has been appointed financial adviser, with near-term funding underway to support early construction and RAP activities. Simultaneously, Lifezone is engaged in talks with several major industrial partners for long-term strategic collaborations.
