The deal includes Piedmont taking a potential 19.9 per cent stake in the company. That will start with an initial 9.9 per cent interest that could potentially grow a further 10 per cent on shareholder approval.

Part of the deal means that Piedmont would also invest $US5 million for a 25 per cent stake in Sayona Quebec where its Authier project was “well advanced”.

Sayona said the funding would help its growth plans including its Authier lithium project as well as its Tansim project.

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Piedmont has also agreed to a binding offtake agreement in which it would take 600,000 tonnes a year of spodumene concentrate, or half of Sayona Quebec’s production, whichever is greater. Spodumene is a source of lithium.

Sayona managing director Brett Lynch said Piedmont had shown tremendous vision and the agreement would underwrite the future of the Authier project.

Lynch has previously worked for MIM, New Hope, Orica and VLI.

Piedmont chief executive Keith Phillips said his company considered Quebec would become one of the world’s major hydroxide production centres because of its abundant resources, low cost sustainable hydroelectricity and proximity to major US and European electric vehicle markets.

Piedmont plans include a fully integrated spodumene to hydroxide business model and has lithium project in North Carolina.

“Sayona’s assets are favourably located in the Val-d’Or region of Quebec, home to major mining operations and proximate to first class infrastructure.”

Sayona’s share price plunged more than 8 per cent this morning on the announcement.

Sayona also holds tenements in Western Australia’s Pilbara.