Vancouver-headquartered Patriot Battery Metals has entered into a subscription agreement with German carmaker Volkswagen for the sale of 15.58-million Patriot shares at C4.42 a share for aggregate proceeds of C$69-million.

Upon closing of the Strategic Investment, Volkswagen will own about 9.9% of Patriot’s issued shares.

The proceeds from the strategic investment will be used for exploration, development and completion of a feasibility study on Patriot's Shaakichiuwaanaan project, in Quebec, as well as for general and working capital purposes.

As part of the strategic investment, Patriot will enter into a binding offtake term sheet with Volkswagen’s wholly-owned and vertically integrated battery manufacturer, PowerCo, for Patriot to supply 100 000 t/y of spodumene concentrate over a ten-year term.

The offtake is expected to supply PowerCo’s cell production activities in Europe and North America, including its battery cell factory in St Thomas, Canada. St Thomas is intended to become PowerCo’s largest cell factory with a production capacity of up to 90 GWh, enough to produce over one-million electric vehicles a year.

Building a North American EV supply chain, from raw materials supply to the construction and operation of Gigafactories, is part of PowerCo’s mission.

“We welcome Volkswagen and PowerCo as our strategic partner. This is a pivotal milestone for Patriot as we bring in a long-term strategic partner who is already a major participant in the European and North American battery supply chain as the first customer of the globally significant Shaakichiuwaanaan project.

"This investment is consistent with our long-term strategy for Patriot to become a global lithium leader and a key supplier of lithium raw materials to the emerging North American and European battery materials supply chains,” comments Patriot president, CEO and MD Ken Brinsden.

Volkswagen Group board member for technology Thomas Schmall says the investment is a significant milestone in the carmaker's "journey to a fully electric future".

"By collaborating with Patriot Battery Metals, we are not only securing key raw materials for cutting-edge sustainable battery technology but also reinforcing our commitment to North America. Together with partners, we are building a dedicated e-mobility ecosystem in North America, ranging from battery technology to software and specific vehicle architectures,” he adds.