Mr. Dirk Harbecke reports
ROCK TECH LITHIUM AND ARCORE AG ANNOUNCE MERGER OF ITS SUBSIDIARIES TO CREATE A FULLY INTEGRATED EUROPEAN LITHIUM COMPANY
Rock Tech Lithium Inc. has signed a binding business combination agreement to form a business combination with Arcore AG, an arm's-length Swiss-based mining company. The goal is to establish a fully integrated lithium supply chain in Europe, reducing dependence on other regions for critical battery raw materials. Lithium is an essential mineral for the energy transition, and demand in Europe is expected to triple by 2030, driven by the increasing need for batteries in electric vehicles and energy storage systems as estimated by McKinsey & Company's battery insight demand model.
Dirk Harbecke, Rock Tech chief executive officer and chairman, commented: "Strong European supply chains are essential to secure the regions' strategic autonomy, promote industrial competitiveness and enable the transformation to a climate-neutral economy. Europe is currently heavily dependent on imports of critical raw materials such as lithium. This is an important step for Rock Tech to become the European leader in battery raw materials supply."
Jeff Stone, interim chief executive officer, Arcore, stated: "Caring for this exceptionally vital asset of the Republic of Srpska is a fiduciary duty that we assume with the utmost responsibility. It is with that responsibility in mind that we formally submit our concession application. It is a privilege for Arcore alongside Rock Tech to play a defining role in the creation of an independent European supply chain of critical metals."
Vladimir Rudic, managing director of Arcore Doo in Bosnia-Herzegovina, added, "The Lopare project, thanks to our collaboration and association with Rock Tech, and their cutting-edge technological innovations, will be the standard bearer of new trends in the development of sustainable mining in this traditional mining region."
Formation of NewCo
Rock Tech and Arcore will establish a new European entity (NewCo). Upon closing, it is intended that: (i) Rock Tech will contribute the shares of its wholly owned subsidiary Rock Tech Guben GmbH to NewCo, and will hold shares in NewCo representing 75 per cent of NewCo's registered share capital; and (ii) Arcore will contribute the shares of its wholly owned subsidiary Arcore doo to NewCo and hold shares representing 25 per cent of NewCo's registered share capital.
The core assets of NewCo will include Rock Tech's fully permitted lithium converter in Guben, Germany, and Arcore's lithium-boron-magnesium mining project in Lopare, Bosnia-Herzegovina. It is envisioned that the Lopare project will deliver lithium sulphate feedstock (produced at site) to the Guben converter from 2030 onward; in addition to the already secured spodumene supply from contracted partners. Utilizing lithium sulphate as future feedstock is a key step in establishing a circular lithium economy and reducing production costs significantly. This approach aligns with Rock Tech's recycling flow sheet, for which lithium sulphate from black mass recycling is used and subsequently refined into battery-grade lithium hydroxide at Rock Tech's converters. By processing lithium raw material to lithium sulphate at site in Lopare, an important value-adding step will remain in country.
As leading partner of the NewCo, Rock Tech will engage closely with the local communities as part of the permitting process, leveraging its expertise gained from developing its Georgia Lake lithium project in Canada. The Arcore deposit will be developed in co-operation with local stakeholders and in compliance with the strictest environmental, social and governance standards. The company plans to obtain certification under the Initiative for Responsible Mining Assurance standard.
The projects
Guben lithium converter
The centrepiece of Rock Tech's European activities is its planned lithium-hydroxide monohydrate converter in the Brandenburg battery cluster, designed to produce battery-grade LHM for up to 500,000 electric vehicles per year. The project is currently in its final financing phase, with all relevant construction, environmental and operation permits and engineering studies completed. The State of Brandenburg supports the project due to its high strategic relevance. Engineering and project management firm Worley Ltd. has been selected as the engineering, procurement and construction management provider for the Guben converter, and LHM offtake agreements as well feedstock supply have been secured.
Lopare lithium project
Arcore's mineral deposit in the Lopare region of Bosnia-Herzegovina has the potential to become one of the largest lithium mines in Europe with an estimated 600,000 tonnes of lithium carbonate equivalent. According to the CSA global mineral resource estimate, the deposit contains an indicated resource of 426 million tonnes grading 561 parts per million Li2O and 0.95 per cent B2O3 and an inferred resource of 864 Mt grading 579 ppm Li2O and 0.67 per cent B2O3, respectively. Beyond lithium and boron, the deposit contains significant concentrations of other valuable minerals. Internal estimates indicate that, within the resource area, the material contains an average of 9.41 per cent MgO, 2.3 per cent K2O and 10.82 per cent Al2O3. While these elements are not included in the reported mineral resource estimate, they highlight the broader economic potential of the deposit.
CSA Global Mining Industry Consultants, an ERM group company, completed a mineral resource estimate titled "Lopare-Boron-Lithium-Project" as finalized on Nov. 30, 2022, with report No. R268.2022. The mineral resource estimate is summarized below in the table. Note, Arcore being a privately owned Switzerland-based lithium mining company opted to adhere to Australian Joint Ore Reserves Committee Code 2012 guidelines, meaning that such mineral resource estimate may not align fully with the reporting requirements of Canada's National Instrument 43-101.
The Lopare deposit remains highly prospective, with significant potential to expand the existing resource through additional exploration and technical studies. While elements such as MgO, K2O and Al2O3 are not currently included in the mineral resource estimate, continuing geometallurgical and mineralogical studies will further assess their economic significance. Moreover, exploration beyond the defined mineral resource suggests geological continuity, with a significant exploration target. This exploration target highlights the opportunity for further resource growth and optimization through future drilling programs and study work.
Following the successful completion of the exploration phase, the project has applied for a mining concession. The first important step in the new joint venture will be the finalization of the prefeasibility study to further assess the technical scope and quantify the economic benefits of the project. In addition to developing possible mining and processing methods, this study will comprehensively examine the environmental and social compatibility of the project. The study will be carried out by an internationally experienced engineering consultancy company.
With this joint venture, Rock Tech and Arcore are taking a significant step toward securing a sustainable, efficient and competitive lithium supply chain in Europe, reinforcing the continent's battery industry and energy transition goals.
Scientific and technical disclosure
The scientific and technical disclosure included in this news release has been reviewed and approved by Cameron Andrews, PEng, general manager, Georgia Lake project, a qualified person under National Instrument 43-101 (Standards of Disclosure for Mineral Projects).
Closing conditions
The completion of this transaction remains subject to the fulfilment of all customary closing conditions, including, but not limited to, regulatory approvals, and compliance with applicable legal and tax requirements.
There are no finders' fees associated with this transaction.
About Rock Tech Lithium Inc.
Rock Tech's vision is to supply the electric vehicle and battery industry with sustainable, locally produced lithium, targeting a 100-per-cent recycling rate. To ensure resilient supply chains, the company plans to build lithium converters at the doorstep of its customers, beginning with the company's proposed lithium-hydroxide converter in Guben, Brandenburg, Germany. Rock Tech plans to source spodumene from its own Georgia Lake project in the Thunder Bay mining district of Ontario, Canada, and procure from other environmental, social and governance compliant mines, including sourcing intermediary lithium products. Ultimately, Rock Tech's goal is to create a closed-loop lithium production system. Rock Tech has gathered one of the strongest teams in the industry to close the most pressing gap in the clean mobility story. The company has adopted strict environmental, social and governance standards, and is developing a proprietary refining process to increase efficiency and sustainability further.
About Arcore AG
Arcore is a privately owned Switzerland-based lithium mining company with extensive lithium resources and a commitment to environmental and safety standards while seeking to accelerate Europe's energy transition reliably.
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