The market may be a sea of red on Monday but that hasn't stopped the Greenwing Resources Ltd (ASX: GW1) share price from shooting higher.
In morning trade, the lithium explorer's shares were up as much as 88% to 46 cents.
The Greenwing Resources share price has since eased back but remains up 49% to 36.5 cents.
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Why is the Greenwing Resources share price rocketing higher?
Investors have been bidding the Greenwing Resources share price higher today after the company announced a deal with electric vehicle company Nio.
According to the release, Nio has agreed to pay $12 million to Greenwing to subscribe for 21,818,182 shares at an issue price of 55 cents per share. This will give Nio a shareholding in the company of approximately 12.16%.
Management advised that the deal will help accelerate its exploration program at San Jorge Lithium Project.
What else?
In addition, the automaker has a call option to acquire between 20% to 40% of the issued capital of the Andes Litio business, which holds rights over the San Jorge Lithium Project in Argentina.
The call option is exercisable within 365 days after a JORC report for the San Jorge Lithium Project has been issued or obtained. And depending on the outcome of the report, the Nio call option will have an exercise price of between US$40 million and US$80 million.
Furthermore, once the call option has been exercised, Nio will have direct rights to offtake production in the San Jorge Lithium Project. And subject to shareholder approval, it will also have the right to match any offer to purchase the remaining offtake share.
Management advised that it has agreed to ensure that a JORC report on the San Jorge Lithium Project is issued by 31 December 2023.
