The pair said the deal would consolidate two significant and strategic undeveloped lithium assets in the Americas, "at a time of rapidly growing lithium demand in the context of increasing focus on electric vehicles, energy storage and renewable energy generation".

American Lithium has the TLC claystone project in Nevada, 3.5 hours from Tesla's Gigafactory, and Plateau has the Falchani hard rock lithium project in Peru.

"The combination of assets and key personnel is complimentary and will position American Lithium with a large and diverse lithium resource base and strong technical expertise from which to unlock significant additional shareholder value," American Lithium CEO Michael Kobler said.

Plateau, which also has the Macusani uranium project in Peru, would nominate two directors to the reconstituted board.

American Lithium said it would offer 0.29 units for each Plateau share, with the exchange units consisting of an American Lithium share and half a share purchase warrant.

"The arrangement represents a 72% premium to Plateau shareholders using the trailing 20-day volume weighted average trading price on the TSX Venture Exchange of each company as of market close on February 5, 2021 and valuing the exchange warrants using the Black-Scholes methodology at a 50% volatility," it said.

It was an 84% premium on a spot basis.

Plateau shareholders were expected to hold about 21% of American Lithium once the transaction was completed.

The deal is subject to shareholder and regulatory approvals and expected to close in May.

The pair also entered a C$1.5 million loan agreement to fund Plateau's budgeted working capital needs.

Shares in both companies reached one-year highs intraday.

American Lithium (TSXV: LI) then closed up 18.3% to $3.88 to capitalise it at $466.5 million (US$367.5 million).

Plateau (TSXV: PLU) gained 51.7% to close at 91c, valuing it at $95.5 million (US$75.2 million).