It was a one-two punch on two continents for Lithium One Inc. yesterday.

From its Vancouver head office, the company, which has interests in two lithium projects, announced that a $5-million offering of two-year 8% convertible debentures had closed. The proceeds will be used mainly to fund an option on its operations in Quebec.

And from Argentina, the company -- which has a market cap of about $55-million -- held a formalization ceremony for the special-purpose entity that will develop its project located in the Puna region of that country.

The three external partners -- Korea Resources Corp., LG International and GS Caltex Corp. -- have a chance to gain a 30% stake in the project, once Korea Resources Corp. delivers a US$15-million feasibility study by late next year. The three will have a 10% stake with the balance held by Lithium One. Originally, Lithium One signed a deal with KORES in June. Since then, two other partners have been brought in.

Apart from funding the feasibility project, KORES has agreed to guarantee the project finance for the project to proceed -- provided the feasibility study is positive.

In return, the consortium will receive 30% of the production from the project, though it can subscribe for an additional 20% on a right of first refusal basis.

"The key element in the specialty minerals business is to have an end user as a part of that project," said Patrick Highsmith, the company's chief executive. "Having GS Caltex and LG International as partners means that Lithium One will be working with two of the top groups in the industry; LG is number two in battery manufacturing while GS Caltex is moving into that field."

Lithium One closed yesterday at $1.19. Over the past year, they have traded in the range of 73¢-$1.73.

bcritchley@nationalpost.com