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$13.5M Placement Cornerstoned by Strategic Investors
April 21, 2022
Funds to fast-track exploration of Pilbara Lithium Projects with MinRex targeting 25,000m of drilling in the next 12 months
MinRex Resources Limited ( ASX: MRR) (“MinRex” or “the Company”) is pleased to announce it has received firm commitments for a $13.5 million capital raising (Placement) to underpin the acceleration of MinRex’s Pilbara LithiumTin-Tantalum exploration strategy and continued exploration of its other WA and NSW gold, precious and base metal projects
HIGHLIGHTS
- Firm commitments received for heavily oversubscribed $13.5 million capital raising at 6.2 cents with a 1:2 free attaching option (ex. $0.10, 2 yr term)
- $6.8 million cornerstone investment received from a strategic group of investors who are executives of Chinese and Australian mining groups involved in exploration, development, refining and processing of precious and battery metals
- MinRex now positioned to fast-track exploration activities, targeting 25,000m of drilling over its Pilbara Lithium-Tin-Tantalum Projects in the next 12 months and continued exploration of its other projects
The Placement was heavily oversubscribed and strongly supported by investors, including the introduction of a $6.8 million cornerstone group of investors who are executives of Chinese and Australian mining groups involved in exploration, development, refining and processing of precious and battery metals. The group includes some persons who were early-stage seed investors in Global Lithium Ltd (ASX:GL1).
The Placement was conducted at $0.062 per fully paid ordinary share (New Shares), representing a 16.2% discount to MinRex’s 15-day VWAP and last closing price of $0.074, together with free attaching options (ex. $0.10, 2 years) (New Options) on the basis of one option for every two shares subscribed for under the Placement, subject to shareholder approval. Accordingly, the Placement comprises the issue of:
- 109,677,419 New Shares and 54,838,710 New Options to the cornerstone group of investors; and
- 108,064,516 New Shares and 54,032,258 New Options to other sophisticated and professional investors.
All New Shares are to be issued under the Company’s existing placement capacity in accordance with ASX Listing Rules 7.1 and 7.1A as follows: LR7.1 – 131,264,315 New Shares; LR7.1A – 86,477,620 New Shares. Allotment of New Shares, except for allotment to the cornerstone group, is anticipated to occur on Thursday, 28 April 2022. Allotment of New Shares to the cornerstone group is anticipated to occur on 1 June 2022. All New Options will be allotted to subscribers subject to prior shareholder approval, with a general meeting of shareholder expected to be held in early June 2022.
MinRex Resources Managing Director, George Karageorge commented:
“This capital raising marks another important milestone in our journey to becoming the next lithium producer in Pilbara. The past six months has seen us complete an outstanding acquisition of highly prospective Lithium-Tin-Tantalum Projects, with the identification of extensive spodumene and lepidolite from surface pegmatites. The successful completion of the Placement will allow MinRex to increase our exploration momentum during this year. We look forward to furthering our relationships with our cornerstone investors given their experience in the exploration, development, refining and processing of precious and battery metals in Australia.
Finally, I would like to acknowledge the support of all new and current shareholders, who have demonstrated such support by their commitment to subscribe for $13.5 million under the Placement.”
Canaccord Genuity (Australia) Limited acted as the sole Lead Manager for the Placement. Capital raising fees of 6% on the proceeds raised under the Placement are payable to the Lead Manager, with 4% selling fees to be passed onto other brokers that participated. Ten (10) million New Options will also be issued to the Lead Manager (or its nominee), subject to shareholder approval.
A 6% introductory fee payable on subscriptions completed from cornerstone investors is also payable to Scott Li (or his nominee), to be settled by the issue of New Shares at the same price as under the Placement, subject to shareholder approval. If shareholder approval is not received within 3 months, then such fees are to be settled by MinRex in cash.
Funds raised from the Placement will be applied to exploration on MinRex’s Pilbara Lithium Projects, continuation of exploration on existing WA and NSW gold, precious and base metal projects and for general working capital requirements.
Pilbara Exploration Program
MinRex has finalised its planned exploration program over its Pilbara Lithium Projects and plans to drill up to 25,000m within the next 12 months as follows:
- Drilling approvals already underway with 5x POW applications already registered.
- Ground proofing and drill pad construction to commence in May.
- RC drilling expected to commence over Tambourah North and Coondina Projects in June – August 2022. RC program currently targeting 8,000m over outcropping spodumene bearing pegmatites.
- RC drilling expected to commence over Sisters and Shaw River Projects in August – October 2022. RC program currently targeting 8,000m over outcropping spodumene bearing pegmatites.
- Additional geological mapping and rock chip sampling will be undertaken over Projects before drilling commences.
- Infill and resource extension RC drilling over delineated Lithium mineralised zones expected to commence October – December 2022, targeting 9,000m of RC drilling with a view to defining new Lithium deposits.
- Further extensional drilling to be planned once all 3D geological Models have been established for recommencement of RC drilling in early 2023.
This ASX announcement has been authorised for release by the Board of MinRex Resources Limited.
Click here for the full ASX Release
This article includes content from MinRex Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
MRR:AU
22h
11 Lithium Stocks Betting on Direct Lithium Extraction (Updated 2024)
Lithium demand is expected to increase significantly in the coming decades as the world turns to greener sources of energy to meet its net-zero goals. But extracting and processing lithium is not an easy task, and challenges and delays are common across projects in the industry.
Many experts believe new technologies could be a way to bring more supply online at a faster rate, with direct lithium extraction (DLE) being called the next potential game changer for the industry.
DLE refers to a variety of technologies used to extract lithium from brines. Some projects are already producing lithium using DLE methods in China and South America, and many junior miners looking into these processes to bring their projects online.
For Goldman Sachs (NYSE:GS), DLE has the potential to significantly impact the lithium industry, “with implementation on the extraction of lithium brines potentially revolutionary to production/capacity, timing and environmental impacts/permitting."
Using filters, membranes, ceramic beads or other equipment, DLE technologies extract lithium from brines faster than traditional methods and have a lower carbon footprint. According to Fastmarkets, 13 percent of the world's lithium will be produced using DLE by 2030.
But questions remain as to when DLE might make a difference at a commercial scale, and there are also concerns related to water usage. Currently, the only commercially proven approach to DLE has been adsorption; other methods, such as ion-exchange or solvent extraction, are still in the pre-commercial stage.
William Adams of Fastmarkets told the Investing News Network (INN) in 2023 that he believes DLE will work and that ultimately it is needed.
“It's certainly part of our long-term forecasts, but it is a question of time,” he said. “We are getting closer and closer to the stage where we will see it.”
What to look for in a DLE stock?
There are a variety of lithium companies working with direct lithium extraction technology. INN spoke with experts in 2023 to get their thoughts on DLE companies.
Daniel Jimenez of iLi Markets told INN that when considering DLE, it's important for investors to remember that a wide array of technologies fall under that umbrella.
“We have to think of them separating what is brines in salt lakes, and maybe very low-grade lithium brines in other places,” he said. “To put it simply, I don’t think we will have any supply coming from these technologies in the next five years.”
Similarly, Chris Berry of House Mountain Partners pointed out that direct lithium extraction is not a single technology.
“It's not a single process; your DLE process is going to be geared and engineered based on the complexity of your brine source,” he told INN. “One of the challenges in terms of picking winners on the DLE side is how scalable your technology is.”
He added that when looking at companies to invest in, the basics — such as whether the management team has ever done this before — are key. “What is their capability with respect to very complicated chemical processing? There's some experience out there, but we need a lot more of it," Berry explained.
For Rodney Hooper of RK Equity, DLE is an opportunity. “The way I look at DLE opportunities has always been to value it as optionality rather than as a project,” he said. “It's a big bid on a new technology, but it is needed, it would fit very well in the ESG narrative, so we hope that it does work. But the timelines need to be more realistic in terms of building pilot plants or projects on a stage-by-stage basis, and then seeing that they pan out.”
Which lithium companies are betting on DLE?
One of the most well-known lithium producers in the western world currently using a proprietary DLE process is Argentina-focused Livent (NYSE:LTHM). Given Chile’s recent push for more DLE, producers SQM (NYSE:SQM) and Albemarle (NYSE:ALB) are also looking into this technology. Aside from that, diversified miner Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) invested in a DLE project in Argentina last year, and Eramet (ERA:EPA) is also developing an asset in the South American country using this technology alongside China's Tsingshan Holding Group.
Within the private sector, Controlled Thermal Resources, EnergyX, EnergySource Minerals, IBC Advanced Technologies and Cornish Lithium are some of the players in the DLE space.
It's clear there are many lithium companies looking to develop resources using DLE technologies. Here INN looks at 11 lithium stocks betting on DLE, listed by market cap. Only publicly traded companies listed on the NYSE, TSX, TSXV, CSE, LSE and ASX with market capitalizations of at least US$10 million and no more than US$2 billion were considered. Data was collected on October 18, 2024, using TradingView's stock screener.
1. Vulcan Energy Resources (ASX:VUL,OTC Pink:VULNF)
Market cap: US$622.12 million
Share price: AU$4.89
Vulcan Energy Resources is focused on lithium production in Europe, with projects in Germany and Italy. The company says it is aiming to decarbonize lithium production by "producing a world-first lithium hydroxide monohydrate chemical product with carbon neutral footprint."
To this end, Vulcan is developing the Zero Carbon lithium project in Germany's Upper Rhine Valley using a proprietary alumina-based adsorbent process. Vulcan draws on naturally occurring, renewable geothermal energy to power the lithium extraction process, and the process also creates a renewable energy by-product. This extraction method also uses significantly less water than traditional extraction methods and has a small footprint, according to the company.
Vulcan has signed lithium offtake deals with Netherlands-based Stellantis (NYSE:STLA), Renault (EPA:RNO) and Volkswagen (OTC Pink:VLKAF,FWB:VOW). Starting in 2026, Vulcan is set to deliver between 26,000 and 32,000 metric tons (MT) of battery-grade lithium chemicals for an initial six-year term to Renault, and between 34,000 and 42,000 MT of battery grade lithium hydroxide over a five-year term to Volkswagen. Aside from signing supply deals with automakers, Vulcan has inked agreements with battery materials maker Umicore (EBR:UMI) and South Korea's LG Energy Solutions.
2. TETRA Technologies (NYSE:TTI)
Market cap: US$444.3 million
Share price: AU$3.38
TETRA Technologies is an energy services and solutions company. In recent years, it has expanded its business into the low carbon energy markets. This includes the commercialization of its TETRA PureFlow ultra-pure zinc bromide clear brine fluid for stationary batteries and energy storage, as well as the development of its lithium and bromine assets in Arkansas.
TETRA and Standard Lithium, the next DLE company on this list, inked agreements in 2017 and 2018 that allow Standard Lithium to extract lithium from a portion of Tetra’s brine leases.
In August 2024, private DLE firm KMX Technologies announced it had secured funding from TETRA Technologies to help develop and bring to market products for the commercial processing of battery-grade lithium. TETRA CFO Elijio Serrano will also be joining the KMX board of directors.
3. Standard Lithium (TSXV:SLI,NYSEAMERICAN:SLI)
Market cap: US$381.01 million
Share price: C$2.74
Standard Lithium’s flagship projects, the Lanxess project and the South West Arkansas project, are located in Southern Arkansas, US, near the Louisiana state line. They are part of the Smackover formation, a geological formation that stretches across multiple US states and is a prolific source of oil. More recently, it has been looked at for its lithium brine potential.
Standard Lithium completed a pre-feasibility study for the project in September 2023 based on an indicated mineral resource estimate of 269,000 MT of lithium with an inferred resource of 74,000 MT. The study demonstrated a base case after-tax net present value of US$3.09 billion with an internal rate of return of 32.8 percent and a payback period of four years.
The company has a partnership with specialty chemicals company Lanxess (OTC Pink:LNXSF). At Standard's DLE demonstration plant at the Lanxess project, the company is testing commercial lithium extraction and purification of brine. A definitive feasibility study for the plant also released in September 2023 shows an after-tax net present value of US$550 million and an internal rate of return of 24 percent, as well as an annual production of 5,700 MT of battery-quality lithium carbonate.
The company is also pursuing the development of other projects in East Texas' portion of the Smackover formation, as well as approximately 45,000 acres of mineral leases located in the Mojave Desert in San Bernardino County, California.
Standard partnered on a 55/45 joint venture for South West Arkansas and East Texas with Equinor (NYSE:EQNR) in May 2024. In September, Standard announced it had been selected by the US Department of Energy for an award of up to US$225 million to develop the South West Arkansas project.
4. International Battery Metals (TSXV:IBAT)
Market cap: US$88.17 million
Share price: C$0.44
International Battery Metals is a DLE technology company that says it has "developed and patented the world’s fastest, scalable lithium-processing technologies and has pioneered the only patented technology able to achieve commercial-scale lithium production in just 18 months."
The company’s proprietary modular DLE technology quickly and efficiently recovers more lithium from brine than traditional methods, with recoveries of 68 percent, and is more environmentally friendly than traditional methods as well.
International Battery Metals achieved first commercial production in July 2024 at its proprietary modular DLE plant in Utah. The company heralded it as "an industry landmark representing the first lithium produced from the only modular DLE operation in the world and the first commercial DLE operation in North America."
5. Anson Resources (ASX:ASN,OTCQB:ANSNF)
Market cap: US$68.59 million
Share price: AU$0.079
Anson Resources, via its subsidiary A1 Lithium, is developing the Paradox lithium project in Utah, US. The project hosts a mineral resource estimate of 1.04 million MT of lithium carbonate equivalent and 5.27 million MT of bromine.
The company partnered with Sunresin, a Chinese company offering DLE lithium technology, to use its proprietary DLE process at Paradox.
Anson has reached a number of important milestones in 2024. In May, the company secured a binding offtake agreement with LG for 4,000 dry metric tons per year of battery-grade lithium carbonate over five years beginning in 2027. Shortly after, Anson received its first permit approval from Utah's Department of Natural Resources to source water, or brine, for lithium extraction at its Green River lithium project.
Anson partnered with Koch Technology Solutions in June to use Koch's Li-Pro process for a pilot Lithium Selective Sorption unit at the Green River lithium project. The company announced in August that it had produced its first battery-grade lithium carbonate from brines at Paradox, and can now provide product samples to potential off-take partners.
6. E3 Lithium (TSXV:ETL,OTCQX:EEMMF)
Market cap: US$64.01 million
Share price: C$1.23
E3 Lithium is developing the Clearwater lithium project in Alberta with the goal of producing high-purity, battery-grade lithium products. E3 plans to process brine from Clearwater using its DLE ion-exchange technology, which it is scaling towards commercialization.
The company's technology uses a proprietary sorbent designed to be highly selective toward lithium ions, allowing it to "quickly and efficiently reduces large volumes of low-grade brine into a high-grade lithium concentrate in one step, simultaneously removing nearly all impurities." It achieves over 90 percent recoveries and reduces impurities by over 98 percent.
The company received C$3.5 million in funding from Natural Resources Canada for a pilot project using its DLE technology to extract lithium from Leduc brines in Alberta, and data from it helped to inform the June 2024 pre-feasibility study, which confirmed the economic viability of the Clearwater project. In October 2024, E3 Lithium stated it had successfully completed all milestones of the pilot project.
Earlier in the year, E3 Lithium completed expansion work at its Calgary-based lab to include the production of battery-grade lithium carbonate. The company announced plans in August to construct a fully integrated lithium brine demonstration facility in Alberta aimed at producing battery-grade lithium carbonate from brines within the Leduc reservoir. The Government of Alberta has invested C$5 million in the plant. That same month, E3 Lithium entered into a partnership with Pure Lithium to design a lithium metal anode and battery pilot plant in the province.
7. Lake Resources (ASX:LKE,OTCQB:LLKKF)
Market cap: US$59.697 million
Share price: AU$0.07
Lake Resources is a lithium developer using state-of-the-art ion-exchange extraction technology for the production of sustainable, high-purity lithium from its flagship Kachi project in Catamarca, Argentina. The company’s technology partner is California-based Lilac Solutions, which says its technology protects the environment while accelerating project development, increasing recovery and yielding a high-purity product.
The low price environment for lithium carbonate and difficulty finding a strategic partner led Lake Resources to place the project on hold in June 2024. The company is still planning to bring the project into production in 2027 if market conditions improve.
8. Arizona Lithium (ASX:AZL,OTCQB:AZLAF)
Market cap: AU$50.69 million
Share price: AU$0.017
Arizona Lithium is an exploration company headquartered in Australia and engaged in the development of North American lithium projects, with its Big Sandy lithium project in Arizona and Lordsburg lithium project in New Mexico. At the end of 2022, Arizona Lithium acquired Prairie Lithium, a lithium exploration and technology company. The acquisition brought the Prairie lithium project in Saskatchewan, Canada, and the company's DLE technology, into Arizona Lithium's portfolio.
In November 2023, the company commence operations at a pilot DLE test plant at the Prairie project, using Prairie's proprietary lithium extraction technology. The DLE method employs an ion-exchange material to selectively extract lithium from brine using equipment that is expected to be readily available at commercial scale. The following month, Arizona Lithium completed a positive preliminary feasibility study confirming "average operating costs of US$2,819 per tonne over the operating life of the project," which it said make Prairie one of the lowest cost projects globally.
The pilot plant project, completed in April 2024, processed over 200,000 liters of brine and produced over 13,500 liters of lithium concentrate. The steady-state phase achieved an average lithium recovery rate of 95 percent. The next month, Arizona Lithium started production drilling at the Prairie lithium project. As of October 2024, construction of Pad 3 had been completed with drilling commencing in the coming weeks. The company plans to identify another nine pads with the goal of reaching total steady state production of 24,000 MT per year.
9. Century Lithium (TSXV:LCE,OTCQX:CYDVF)
Market cap: US$45.64 million
Share price: C$0.40
Century Lithium is advancing its wholly owned Angel Island mine, previously named the Clayton Valley project, which hosts an extensive surface lithium-bearing claystone deposit adjacent to Albemarle’s Silver Peak brine operation in Nevada, US. Of key importance for Nevada-based lithium operations, the company has secured a water rights permit that will cover the majority of the project’s future water requirements.
Century has outfitted its lithium extraction pilot plant in Nevada's Amargosa Valley with Koch Technology Solutions' DLE equipment to produce an intermediate concentrated lithium solution.
In August 2023, testing completed at Saltworks Technologies in British Columbia, Canada, once again showed that product solutions processed via DLE at Century's pilot plant are capable of producing low-cost, high-purity lithium carbonate for the electric vehicle and battery storage markets.
The following April, the company released a positive feasibility study for the Angel Island project outlining a three-phase production plan to produce an average of 34,000 MT per annum of battery-quality lithium carbonate over the 40-year life of the mine. Century Lithium added a lithium carbonate stage to the lithium extraction pilot plant in August, and began producing 99.5 percent lithium carbonate in September.
10. CleanTech Lithium (LSE:CTL,OTCQX:CTLHF)
Market cap: US$20.45 million
Share price: GBX 11.10
CleanTech Lithium is an exploration and development company focused on lithium projects in Chile. The company has three prospective lithium projects: Laguna Verde, Francisco Basin and Llamara. CleanTech Lithium is committed to using renewable power for processing, and it is using DLE in part to reduce the environmental impact of its lithium production.
The company says the DLE method, which is being provided by Sunresin, offers short development lead times and low upfront capital expenditure, as well as no extensive site construction and no evaporation pond development. This means there is no water depletion from the aquifer or harm to the local environment.
In July 2024, CleanTech reported that the first stage of production at the DLE pilot plant was complete with the production of a sample of battery-grade lithium. The company and its partners are working to optimize the downstream process to further lower energy use and carbon emissions as well as capital and operating costs.
11. LithiumBank Resources (TSXV:LBNK,OTCQX:LBNKF)
Market cap: US$14.38 million
Share price: C$0.405
LithiumBank Resources is a development company focused on lithium-enriched brine projects in Western Canada — including its Boardwalk lithium project in Alberta — where it says low-carbon-impact, rapid DLE technology can be deployed.
The company has partnered with Conductive Energy to use its ion-exchange DLE process at Boardwalk. Conductive’s ion-exchange materials extract lithium from brine resources to produce lithium chloride, which is then processed using Conductive’s electrolytic refining process to create battery-grade lithium.
LithiumBank announced in September that initial pilot plant operations at its DLE facility in Calgary, Alberta, resulted in recoveries greater than 98 percent of lithium from brine and over 40,000 liters of brine sourced from four wells at Boardwalk.
“Successfully recovering over 98 (percent) lithium from Boardwalk brine at the pilot scale is a very significant achievement for LithiumBank,” stated Executive Chairman Paul Matysek. “Consistently achieving this level of recovery at scale is of paramount importance as we work towards efficiently producing a battery grade lithium."
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Lake Resources, Century Lithium and CleanTech Lithium are clients of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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21 October
Pursuit Minerals Limited (ASX: PUR) – Trading Halt
Description
The securities of Pursuit Minerals Limited (‘PUR’) will be placed in trading halt at the request of PUR, pending it releasing an announcement. Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Thursday, 24 October 2024 or when the announcement is released to the market.
ASX Compliance
Click here for the full ASX Release
This article includes content from Pursuit Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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21 October
Lithium Market Update: Q3 2024 in Review
Lithium carbonate values saw further declines in the third quarter, starting the 90 day session at US$12,999 per metric ton and shedding 22 percent by September 10, hitting a three year low of US$10,019.
Despite the contraction, market watchers and analysts are viewing Q3 as a price stabilization period for lithium, noting that the battery metal, which was previously in free fall, likely bottomed out in September.
This theory has been reinforced by an upward trend in prices during the first weeks of the fourth quarter.
Some of Q3's price stability came as lithium producers scaled back output and expenditures to counter slower demand growth, particularly from the electric vehicle (EV) sector, which is the primary driver of lithium demand.
Their response also benefited other segments of the lithium market.
“Chemical prices remained fairly stable over the quarter, ticking down slightly,” Sophia Jang, an analyst at Benchmark Mineral Intelligence, explained by email to the Investing News Network (INN).
“Prices for lithium carbonate in China remained at a premium to hydroxide in a reflection of the growing regional preference for LFP cathode chemistries over high-nickel NCM. However, this gap remained narrow.”
While chemical prices remained close to equal, spodumene prices fell. Jang said this was a delayed response to the decline in chemical prices, as most spodumene pricing contracts reference the chemical spot market.
The decrease in spodumene prices was also mentioned in a July price assessment from S&P Global Commodity Insights. It notes that spodumene has registered a steep price decline since peaking during Q4 2022.
According to Platts data, spodumene with 6 percent lithium oxide content was assessed at US$950 per metric ton on July 15, FOB Australia basis. That's down US$7,250, or 88 percent, from its peak on November 18, 2022.
“Spodumene prices over the past one-and-a-half years have faced severe downward pressures from a slump in lithium chemical prices and demand that has wavered on weaker-than-expected global EV output and sales figures,” wrote Leah Chen, team lead, battery metals pricing, at S&P Global Platts, in a July email to INN.
Lithium supply and demand trends in Q3
Market oversupply, subdued spot market activity and a shift in preferred battery chemistries emerged as the most prevalent trends impacting the lithium market between July and the end of September.
“Q3 has been a quiet quarter on the spot market. The majority of demand from midstream consumers of lithium chemicals was satisfied by volumes delivered under contract,” Jang commented. “Cathode producers secured limited extra material on the spot market, adjusting this according to their demand.”
Prices also faced headwinds from a supply imbalance. “Inventories of chemicals in China remained high, which did not support prices. Several lithium producers, especially those higher up the cost curve that were producing from hard rock, reduced or stopped production due to the deteriorating price environment,” she added.
On the battery side, the once-dominant NCM chemistry lost some of its market share to the lithium-rich LFP design.
“LFP demand growth proved stronger than NCM, resulting in increased LFP production, with some cathode producers undertaking the approximately nine month process of switching a portion of their capacity from NCM to LFP,” said Jang.
EV sales climb as market recovers
Although US EV sales figures for 2024 have come in below projections, the broader EV sector made large gains in September when global sales tallies topped 1.7 million units, setting a new monthly record.
According to data from Rho Motion, the banner month for EV sales represents a 22 percent year-to-date increase. Regionally, the Chinese market saw the most significant increase, with 1.1 million new EVs sold.
“This record-breaking month of EV sales brings new hope to the industry,” said Charles Lester, data manager at Rho Motion, in a mid-October article. He went on to note, “While the electrification of transport seems inevitable, the recent slowdown of sales in many parts of the world has sewn seeds of doubt which can now start to be swept aside. However, the regional disparities are astonishing, with China alone accounting for well over half the global total, meanwhile Europe’s numbers are shrinking, and the US and Canada are steadily growing.”
Another end-use segment that saw demand growth in Q3 was the energy storage system (ESS) sector. Jang noted that it grew steadily even as downstream EV sales growth continued to vary widely between different regions.
"We saw this particularly in North America, where it triggered ESS market participants to secure carbonate ahead of the presidential election in November, fearing tariff increases following either election result,” she said.
Tariffs incentivizing North American EV production
As the third largest producer of lithium and the leader in battery and EV manufacturing, China’s dominance in these markets has led the US, EU and Canada to implement steep tariffs on Chinese EVs.
Most recently, Canada levied a 100 percent tariff on EV imports from the country, citing “unfair” trade policies. China responded quickly by filing a complaint with the World Trade Organization over the 100 percent EV tariffs, as well as Canada's 25 percent tariffs on aluminum and steel products from the Asian nation.
Although the EV tariffs are meant to protect Canadian automakers and the sector, they do little to address the nation’s supremacy in battery manufacturing, nor do they incentivize regional lithium production.
“Tariffs on raw material imports are likely to be more impactful in spurring regional lithium production than tariffs on EV imports. But domestic automakers tend not to be too fond of this as it raises their cost of production. Domestic automakers are more interested in EV import tariffs of course, but the impact of this on regional lithium production is less direct," noted Adam Megginson, an analyst at Benchmark Mineral Intelligence
In the US, tariffs on Chinese lithium-ion batteries for EVs are set to jump from 7.5 percent to 25 percent in 2025, while tariffs on EV imports will climb to 100 percent. However, even as the Biden administration hikes taxes on Chinese EVs, it is offering help to the domestic auto sector.
“We have seen strong funding support at the federal level, with a second round of grants from the US Department of Energy unveiled targeted at battery raw materials projects,” said Megginson.
The analyst went on to note that SWA Lithium, a joint venture company owned by Canada's Standard Lithium (TSXV:SLI,NYSEAMERICAN:SLI) and Norwegian energy company Equinor (NYSE:EQNR), received a US$225 million grant from the US for the construction of Phase 1 of the South West Arkansas project.
The Department of Energy's Office of Manufacturing and Energy Supply Chains, which oversees the funding, also awarded a grant to another US-based company. “American lithium project developer TerraVolta was selected by the (Department of Energy) to receive a US$225 million grant for its Liberty Owl project, located in Texarkana, Texas. TerraVolta plans to commence construction in 2028, with production the following year,” said Megginson.
Lithium projects in the pipeline
Although the lithium market remained depressed and well supplied during the third quarter, Benchmark Mineral Intelligence is forecasting a supply shortage starting as early as 2025.
While there are currently 101 lithium mines globally, future supply may struggle to meet growing demand, particularly with China expected to drive a 20 percent annual increase over the next decade.
Low lithium prices have already led to reduced project investments and capital expenditures. However, as Jang pointed out, several significant investments in future supply were made during the third quarter.
“In July 2024, European Lithium (ASX:EUR,OTCQB:EUEMF) and Obeikan Group signed a 50/50 joint venture agreement to jointly develop the construction and operation of a lithium hydroxide facility in Saudi Arabia,” she said.
The Benchmark Mineral Intelligence analyst also noted that the EU signed a framework agreement on critical raw materials supply with the Republic of Serbia in July.
Of course, there were also challenges in the quarter. July saw Rio Tinto’s(ASX:RIO,NYSE:RIO,LSE:RIO) plans to advance the Jadar lithium project in Serbia met with opposition. Protestors were demanding that the country's government revoke permission for the proposed mine and implement a lithium-mining ban.
An October 7 parliamentary vote in Serbia failed to enact such a ban.
Jang also outlined other notable development news from the quarter, including Ganfeng Lithium's (OTC Pink:GENF,SZSE:002460,HKEX:1772) August investment in Lithium Argentina’s (TSXV:LIT,OTCQX:LILIF,FSE:OAY3) Pastos Grandes lithium brine project in Salta, Argentina, marking a significant expansion in its South American operations.
Also in August, E3 Lithium (TSXV:ETL,OTCQX:EEMMF) entered a joint development agreement with Pure Lithium to explore the design of a lithium metal anode and battery pilot plant in Alberta, Canada.
“In September 2024, Ganfeng Lithium announced a RMB 500 million (US$70.5 million) investment to boost cathode production at its mica mine and processing project in Inner Mongolia,” she said.
“Additionally, SQM Australia (NYSE:SQM) partnered with Andrada Mining (LSE:ATM,OTCQB:ATMTF) in September to jointly develop the Lithium Ridge asset in Namibia.”
Continuing this trend, Rio Tinto announced plans to spend US$6.7 billion to acquire US-based Arcadium Lithium (NYSE:ALTM,ASX:LTM) in early October.
Lithium trends to watch as 2024 continues
If the lithium market has indeed bottomed, there may be opportunities for those with the right risk appetite.
According to a late July report from Sprott, while the long-term outlook for lithium miners remains positive due to rising demand, many producers have experienced significant share price drops throughout 2024.
The firm believes that given lithium's demand outlook, these stocks could be well positioned for future growth. For investors, this could mean a chance to invest in lithium miners at lower prices compared to 2023.
On a different note, Megginson encouraged investors to watch the US election moving forward.
"All eyes will be on the US election to see whether a Trump presidency brings about significant structural changes to the (Inflation Reduction Act), or a Harris presidency strengthens this policy support picture," he said.
"We typically expect demand for lithium chemicals to be highest heading into Q4, as it tends to be the strongest quarter for EV sales. Given that feedstock supply upstream remains fairly strong, and chemicals supply in the midstream remains robust, we may not see much movement in prices to the end of the year," added Megginson.
Looking ahead to 2025, the analyst said he expects to see more market consolidation if prices remain rangebound. This could also lead to companies looking for merger and acquisition opportunities.
“In 2025, it will be interesting to see which projects are forced to pause or halt production due to the price level challenging their economics,” he said. “Lastly, we will be watching lithium project developments in Africa closely, as several companies are actively developing capacity in the continent, particularly in Zimbabwe and Namibia."
Megginson added, “Should this new hard-rock supply come online, and at a sufficient grade quality and consistency, it could pose a challenge to incumbent producers who sit higher up on the cost curve.”
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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20 October
Successful Placement
Chariot Corporation Limited (ASX:CC9) (“Chariot” or the “Company”) is pleased to announce that it has received firm commitments for a placement raising A$1.618 million (the “Placement”) before costs, though the issuance of approximately 8.09 million fully paid ordinary Chariot shares (“Shares”) at a price of A$0.20 per Share on the terms set out in this announcement.
HIGHLIGHTS:
- Successful Placement: Chariot has received firm commitments for a A$1.618 million placement of 8.09 million new shares at A$0.20 per share.
- Strong Investor Support: The placement was strongly backed by a group of institutional, sophisticated and professional investors with Ignite Equity Pty Ltd acting as lead manager.
- Directors’ Subscription: The Directors have subscribed for A$150,000 under the Placement (subject to shareholder approval at the next general meeting).
- Use of Placement Proceeds: The existing cash reserves combined with the proceeds of the placement will fund (i) phase 2 drilling at the Black Mountain Lithium Project, (ii) the 4th purchase price payment to Black Mountain Lithium Corp., one of the Black Mountain Project vendors, (iii) initial execution of the pilot mine strategy, including metallurgical testing in Perth and a scoping study for a pilot mine and general working capital.
- Upcoming Activities: Chariot is progressing with the phase 2 drilling program which seeks to define a maiden resource estimate to advance the pilot mine initiative at Black Mountain.
The placement was strongly supported by a group of institutional, sophisticated and professional investors, including existing shareholders and associates of Ignite Equity Pty Ltd, which acted as the lead manager for the placement.
Placement Terms
The placement terms are as follows:
Certain members of the Company’s Board of Directors have elected to subscribe for 750,000 shares, 375,000 2025 Options and 375,000 2026 Options. The issue of the shares and options under this Placement is subject to the approval of Chariot’s shareholders at the next general meeting.
Use of Proceeds
The Placement proceeds will be used to fund (i) phase 2 drilling at the Black Mountain Lithium Project, (ii) the 4th purchase price payment to Black Mountain Lithium Corp., one of the Black Mountain Project vendors, (iii) initial execution of the pilot mine strategy, including metallurgical testing in Perth and a scoping study for a pilot mine and general working capital.
Click here for the full ASX Release
This article includes content from Chariot Corporation, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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18 October
GM Strengthens Lithium Supply Chain with US$625 Million Investment in Thacker Pass
General Motors (GM) (NYSE:GM) is strengthening its connection toLithium Americas (TSX:LAC,NYSE:LAC) via a joint venture centered on advancing the Thacker Pass lithium project in Humboldt County, Nevada.
In a Wednesday (October 16) press release, the companies said GM will provide US$625 million in cash and letters of credit, and will acquire a 38 percent asset-level ownership stake in Thacker Pass.
The Detroit-based carmaker emphasized to Reuters that it is keen to secure electric vehicle (EV) raw materials.
"We don't want to become a mining company," Jeff Morrison, GM’s senior vice president, told the news outlet. "Our main goal is to build out a North American based, Western-allied, reliant supply chain. To do that, we have to pick partners and assets and figure out what they need to do to industrialize and be successful.”
Lithium, a key component in EV batteries, is in high demand as automakers ramp up their EV offerings. The Thacker Pass asset is touted as North America’s largest depositary of the resource.
GM's US$625 million contribution will be divided into phases. It will provide US$330 million in cash when the joint venture closes, and US$100 million at a later stage, when a final investment decision for Phase 1 is made.
There is also a US$195 million letter of credit facility that Lithium Americas will be able to use as collateral to support reserve account requirements under its conditional US$2.3 billion loan from the US Department of Energy.
The companies note in Wednesday's release that the new joint venture builds on GM’s previous investment in Lithium Americas. In February 2023, GM invested US$320 million into the company, acquiring 15 million common shares.
This week's agreement also extends GM's current Thacker Pass offtake agreement, with the company now having the right to up to 100 percent of production volumes from Phase 1 for 20 years. Once the joint venture closes, GM will also enter into a further 20 year offtake for as much as 38 percent of Phase 2 output volumes for Thacker Pass.
In addition to the Lithium Americas deal, GM has made several other strategic investments in the mining sector.
These include agreements to purchase cobalt from Glencore (LSE:GLEN,OTC Pink:GLCNF) an investment in Queensland Pacific Metals (ASX:QPM) for nickel and cobalt and a lithium supply deal with Arcadium Lithium (NYSE:ALTM,ASX:LTM).
Thacker Pass project has faced some challenges, including protests from local Indigenous communities and environmental groups. Concerns have been raised regarding its environmental impact and proximity to culturally significant lands. Despite this opposition, the mine has received the necessary permits to proceed — Lithium Americas said in its latest quarterly update that it expects to start "major construction" by the end of the year.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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16 October
New Gold with Silver & Base Metals Results Highlight Potential Discoveries in Three Key Areas at Corvette River
- Further mapping and sampling planned to extend and define drilling targets to test the new gold zones identified
Metals Australia Ltd (ASX: MLS) is pleased to announce the results of its Phase 1 mapping and sampling program on its Corvette River Project1. The program focused on three separate target areas within the broad tenement package, covering over 22km of strike length of the highly prospective Lac Guyer Greenstone Belt, located north and south of the Corvette River in northern Quebec (Figure 1).
The Phase 1 sampling program focussed on three key prospects: Felicie on the Corvette Lithium Trend, which hosts Patriot Battery Metals’ world-class Corvette Lithium Project2, and the West Eade and East Eade claims on the parallel Corvette South Trend (see Figure 1).
The program included mapping and extensive rockchip and channel sampling in areas of previous high-grade gold samples found at West Eade and East Eade, as well as follow up of previous high-grade gold-silver-copper results at the Felicie property. Significant results obtained for each of the key target areas are as follows:
- Felicie Project – New results from the western zone of Felicie included trench sample assays grading up to 3.85g/t gold (Au), 19.8g/t Silver (Ag), 0.14% Copper (Cu), 0.84% Zinc (Zn), 0.5% lead (Pb). These results validate historical rock chip sample results that included grades of up to 4.2 g/t Au, 44.1 g/t Ag, 0.23% Cu, 1.39% Pb and 1.25% Zn3, hosted by a northeast trending shear zone mapped for approximately 200m and open to the NE and SW (see Figure 2, Images 1-4)4.
- West Eade Project – New results grading up to 4.42g/t gold were obtained from rock chip samples, validating gold results from prior programs which have included 11.45 g/t & 8.56 g/t Au (2005), 3.37 g/t Au (2019) & 2.56 g/t Au and 5.5 g/t Au (2020)3. Gold mineralisation has been demonstrated over an east-west trending corridor of over 1000m within a strongly folded and faulted banded iron formation (BIF) up to 300m in width and 2,000 m in length. (see Figure 3, Images 5-8).
- East Eade Project – Trench sample assays revealed broad mineralisation grading >0.3 g/t Au, including 1m @ 0.83 g/t Au associated with quartz veins and up to 15% sulphides within a folded and faulted BIF outcrop. This outcropping mineralised zone extends for >400m, is open to the east and west, and appears to be the source of previous high-grade rock chip samples of outcropping boulders grading 29.7 g/t Au3 and 12 g/t Au3, 160m to the east (See Figure 4, Images 9 - 14).
The new results and extensive field mapping have significantly enhanced focus areas for a Phase 2 program. Planning is underway for an exploration program aimed at further defining and extending the mineralised corridors, including pinpointing priority drilling positions for later work.
Figure 1: Metals Australia’s Corvette River Project – East Pontois, Felicie, West Eade & East Eade Prospects – Newresults, previous peak results & geology and magnetics
Metals Australia CEO Paul Ferguson commented:
“The results we have received from our first phase exploration program at our Corvette River project in Quebec are extremely encouraging, confirming three emerging gold discoveries at our Felicie, West-Eade and East-Eade prospects.
Our sampling program has successfully extended the mineralised zone at Felicie, with the new results validating historical data by demonstrating a broad zone of extensive mineralisation which will now be prioritised for follow-up exploration. While the near-surface gold results are significant, silver, copper, lead and zinc are also consistently present with the gold at highly anomalous levels.
The two Eade prospects cover a combined strike length of over 20km. The program was focused on mapping and trenching to extend areas near historical mineralisation. Focus in West Eade was on a Banded Iron stone (BIF) unit over 2km long which hosts disseminated sulphides that had yielded gold results previously. The program extended those results with a best result of 4.42 g/t gold. We are now seeing good mineralisation across approximately 1km of surface strike length extent. These results also warrant further work in this area.
East Eade also contains a large, banded iron formation of over 3.6km strike-length trending east- west. Gold had been found in veins within the BIF unit previously. Numerous channel and rock chip samples in our program yielded gold results up to 0.83g/t within an over 10m wide mineralised zone. Significantly, a large outcrop ridge was identified of sheared, folded and faulted silicate, oxide and sulphide facies within the BIF that also supports further investigation.
The results further underline the prospectivity of the three zones tested for gold, silver and base metals. All three areas warrant more detailed investigation, and our team is working closely with the local Magnor Exploration team on defining next steps for a follow-up program, including further systematic trenching and targeted sampling.
The Corvette River results also demonstrate the value our work programs are generating across our suite of projects in known mineralised zones in Canada and Australia. Our short to near term pipeline of news flow remains strong, with Warambie drilling samples now in the laboratory, drilling at Big Bell North project set to commence this month and Warrego East in the Northern Territory also approaching drill-ready status. Our flagship Lac Carheil project continues to develop as one of the leading graphite projects in North America today, with excellent progress being made across key studies to advance it towards prefeasibility.
Few companies our size have such a portfolio of high-quality projects and even fewer have the technical and financial capability to progress them as we are doing. This places us in an enviable position to be able to unlock significant value from multiple parallel workstreams in the near term.“
Click here for the full ASX Release
This article includes content from Metals Australia Ltd, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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