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Neo Lithium (TSXV: NLC) announced Tuesday it has closed a strategic equity investment by Contemporary Amperex Technology Co. Limited (CATL), the world’s largest EV battery company.

CATL, which supplies lithium iron phosphate batteries to Tesla, announced earlier this year that it will make a sizeable investment in Neo Lithium and help the company develop its South America lithium projects.

As previously planned, CATL has subscribed for over 10.21 million Neo Lithium common shares at a price of C$0.84 per share for gross proceeds to Neo Lithium of C$8.58 million. These shares represent approximately 8% of issued and outstanding shares of Neo Lithium, making CATL the third-largest shareholder of the company.

“The closing of the CATL strategic investment validates the quality of our 3Q project and the capabilities of our management team. It further strengthens our long-term commitment and focus on our project as we work together with CATL to bring 3Q into full development by building a comprehensive financing plan,” Neo Lithium chairman Constantine Karayannopoulos said in a media release.

With the proceeds of the equity investment from CATL, the company now holds a net cash position of approximately C$35 million.

The 3Q project is located in Argentina’s Catamarca province, the largest lithium producing area in the nation. The property covers approximately 35,000 ha including a salar complex of approximately 16,000 ha.

According to a 2019 preliminary feasibility study (PFS), the project contains an estimated 1.3Mt LCE (lithium carbonate equivalent) in proven and probable reserves. The PFS also shows an after-tax NPV of over $1.1 billion and an IRR of 50%.

In March, Neo Lithium announced that it has produced battery-grade lithium carbonate at its pilot plant in Fiambalá, the closest population centre to the project.

Shares of Neo Lithium rose 2.0% by noon EST, sending the Canadian lithium miner’s market capitalization to C$173.9 million.