Sayona (ASX:SYA) share price halted amid new lithium acquisition

Here's why the Sayona share price has been put on ice…

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The Sayona Mining Ltd (ASX: SYA) share price won't be moving today.

Shares in the lithium development company were placed into a trading halt this morning. Soon after, Sayona unveiled its plan to acquire a lithium project in Northern Québec.

Let's lift the lid on this news and inspect it more closely.

Why is the Sayona share price frozen?

Before the market opened today, Sayona requested its shares be placed in an immediate trading halt. The request to the ASX highlighted the announcement of a significant acquisition and capital raising.

The lithium company went on to announce the acquisition of the Moblan Lithium Project. According to the release, this is another step forward in Sayona securing North America's leading lithium asset base.

Furthermore, the Moblan Project is located in the Eeyou-Istchee James Bay region of Northern Québec. This is the same region in which the Whabouchi lithium deposit is located. Excitingly, Whabouchi is considered to be the world's second-richest and biggest lithium deposit, with 27.3 million tonnes of proven and probable reserves.

Additionally, Moblan is expected to contain high-grade spodumene mineralisation. In fact, mineral resource estimates put the number at 12.03 million tonnes at 1.4% lithium oxide. The broad thickness of mineralisation is typically 20 metres to 30 metres wide.

Sayona plans to explore opportunities for expansion of the resource. This includes following up on previous geotechnical drilling which intersected up to 29.1 metres of continuous spodumene-bearing pegmatites outside the resource envelope. Although, shareholders will need to wait to see how the Sayona share price reacts to this news.

However, there is no free lunch — so what are the terms of this acquisition? Under the agreement with Lithium Royalty Corp (LRC), Sayona will acquire LRC's right to purchase the 60% interest in the Moblan Project. From there, Sayona will acquire the interest from Guo Ao for a consideration of US$86.5 million.

In addition, Sayona has agreed to several royalty-based payments to LRC that will be subject to the amount of ore produced.

Management commentary

Commenting on the acquisition, Sayona managing director Brett Lynch stated:

We are delighted to be extending our relationship with Investissement Québec, which has invested billions of dollars in lithium and other resources projects across Québec, including North American Lithium (NAL), Moblan and Nemaska Lithium.

The recent rise in lithium prices reflects the importance of securing quality supply and there is no better place to be than Québec as we develop a lithium resource base to supply North America's fast‐growing electric vehicle and battery industry.

At this stage, the company is yet to reveal the details of its capital raising.

With the trading halt in place until Monday or when a further announcement is released, the Sayona share price is stuck at 17.5 cents.

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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