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$2.5 Million Capital Raise for Continued Development of Rio Grande Sur
June 12, 2024
Pursuit Minerals Ltd (ASX: PUR) (“PUR”, “Pursuit” or the “Company”) is pleased to announce that that it has received firm commitments from sophisticated and professional investors and Directors to subscribe for a placement of approximately 714 million fully paid ordinary shares (“Shares”) in the Company at an issue price of AU$0.0035 per Share to raise gross proceeds of AU$2.5 million (“Placement”). Each placement participant will also be issued one attaching option for every two Shares subscribed for in the Placement (exercise price $0.007; expiry date 3 years from their date of issue) (“New Options”).
- $2.5 million raised from sophisticated investors and professional investors.
- Strong support received from existing shareholders, as well as overseas and domestic institutional investors, with the placement oversubscribed.
- Funds will be used for further development of the Rio Grande Sur Lithium Project in Argentina which is currently progressing its Stage 1 Drilling Campaign in addition to advancing its Pilot Plant towards the first production of Lithium Carbonate.
Under the Placement, the Company will issue 714,285,714 Shares plus, subject to the receipt of shareholder approval, 357,142,856 New Options. Of this total, Pursuit directors will be subscribing for 22,857,143 Shares and 11,428,571 New Options on the same terms that will be subject to shareholder approval at a forthcoming General Meeting (GM).
The issue price of the Placement Shares represents a 12.5% discount to last close of $0.004.
The capital raising will provide working capital for the ongoing development of the Rio Grande Sur Lithium Project, in particular the Stage 1 Drilling Program and advancement of the 250tpa Pilot Plant towards first production of Lithium Carbonate.
CPS Capital Group Pty Ltd (“CPS Capital”) and Inyati Capital Pty Ltd (“Inyati”) acted as the Joint Lead Managers to the Placement, which was significantly oversubscribed. CPS Capital and Inyati will be paid a cash fee equal to 6% of the amount raised under the Placement and will also be issued New Options, at an issue price of $0.001 each, in an amount equal to 25% of the total Shares issued under the Placement (178,571,428 New Options) (subject to shareholder approval in general meeting).
The Placement has been strongly supported by existing shareholders and introduced several new high net- worth investors and domestic and overseas institutions to the Pursuit register. The Shares under the Placement will be issued in a single tranche using the Company’s existing placement capacity under LR7.1 (425,970,713 Shares) and 7.1A (265,457,858 Shares).
Commenting on the success of the Placement, Managing Director & CEO, Mr Aaron Revelle, said:
“Pursuit is delighted with the strong support for the placement. This raising will provide critical funding to continue near term high value creating work programs at our Rio Grande Sur Lithium Project in Argentina with our maiden drilling program nearing completion of its first hole, with the second hole to commence immediately after. It is expected that the drilling program will result in a JORC resource upgrade before the end of the calendar year. Additionally, our Pilot Plant continues operations towards the production of our first lithium carbonate. It was again a pleasure working with CPS Capital and Inyati to complete the raising. We look forward to delivering for shareholders and stakeholders through execution of our upcoming significant work programs.”
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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02 May
Pursuit Minerals
Overview
Pursuit Minerals Ltd. (ASX:PUR) is a top-tier lithium exploration and development company. The company is focused on its flagship Rio Grande Sur lithium project in the Salta Province of Argentina. The project is strategically located in an area known as the Lithium Triangle which hosts 50 percent of the global lithium resources and 40 percent of the current global lithium production. Argentina is the world’s third largest producer of lithium, behind Australia and Chile.
The project spans an area of 9,260 hectares on the Rio Grande Salar and is adjacent to several operating lithium mines and development operations, including Acradium Lithium’s Fenix lithium mine and the Olaroz lithium mine. The Rio Grande Salar holds a historical Ni 43-101 resource declared by LSC Lithium, formerly listed on the TSX prior to being acquired by Plus Petrol of 2.1 million tons (Mt) of lithium carbonate equivalent (LCE) with an average grade of 370 milligrams per litre (mg/L). This resource was mostly obtained from shallow drilling to 100 metres.
Pursuit delivered a maiden JORC Inferred Mineral Resource Estimate (MRE) of 251.3 kt LCE at 351 mg/L at the Rio Grande Sur project. The inferred resource relies on recent geophysical surveys and historical drilling, encompassing only a small portion of the known mineralization. Notably, excluding the highly promising Mito tenement from the current MRE highlights the unexplored potential for further resource expansion.
Pursuit has commenced its Stage 1 maiden drill program focused on upgrading the inferred resource. The drilling is anticipated to reach depths of 500 to 600 metres below surface, significantly deeper than the existing defined JORC mineral resource depth. Other companies in the region have obtained impressive results and grades of 900 mg/Li+ at depths of 500 metres, some of the highest known grades in Argentina. Pursuit expects a material resource upgrade in the second half of 2024 which will build on the inferred maiden resource.
Drill cores and packer lithium brine samples from Pursuit’s Stage 1 drilling program at the Rio Grande Sur Project.
In addition to having an attractive lithium resource, Pursuit is focused on the production of lithium carbonate to meet the supply side response to growing lithium demand. Recently, the company announced the first phase of operations of its 250 tons per annum (tpa) pilot plant to produce lithium carbonate. The plant will generate both technical and battery grade lithium carbonate at a purity of 99.95 percent, employing a conventional evaporation process.
Pursuit has submitted advanced environmental permits for the construction of the 250 tpa evaporation ponds and Stage 2 drill program at the northern tenement of the Rio Grande Sur project.
The establishment of the ponds is expected to take place in the latter part of 2024, pending environmental approvals. The ponds and the plant are planned to be situated on the Sal Rio 02 tenement enabling the possibility of initiating the first production of lithium carbonate on-site in 2025.
Pursuit is targeting continuous production at Rio Grande Salar and expects the current setup to be scalable to produce 15,000 to 20,000tpa of technical and battery grade lithium carbonate.
250-ton lithium carbonate pilot plant
The company’s focus on Argentina has several advantages. The new government, led by its president Javier Milei has signaled a market-friendly and pro-business policy shift. This should be a positive development for lithium miners given that Argentina has one of the largest lithium reserves in the world. Argentina holds 21 percent of the world’s 105 million tons of lithium resources, second only to Bolivia, according to the United States Geological Survey’s Lithium Statistics and Information 2024 report.
Lithium is in great demand driven by the growth in electric vehicles (EVs). Bloomberg NEF estimates lithium demand to jump by 225 percent to 2.6 Mt of LCE by 2030, translating into a CAGR of 16 percent. In a net-zero scenario, Bloomberg pegs the demand at 3.6 Mt of LCE by 2030, a CAGR of 19 percent.
The company remains focused on project execution that will deliver long-term shareholder value, including the completion of stage 1 drilling, JORC resource upgrade, first production of lithium carbonate and increasing production capacity to 250 tpa, and receipt of environmental permits, all within the first half of 2024.
In addition, Pursuit has identified the following catalysts over the next 12 months:
- Q3/Q4 2024: start of evaporation pond construction at Rio Grande, off-take agreement, relocation of 250 tpa pilot plant to Rio Grande.
- Q4 2024/Q1 2025: Detailed mineral resource study for commercial scale lithium carbonate operation; stage 2 drilling and JORC resource upgrade; first production from 250 tpa plant could commence as early as Q4 of 2025.
Company Highlights
- Pursuit Minerals is an ASX-listed company focused on advancing a pre-production lithium brine operation in Argentina.
- The company’s flagship Rio Grande Sur project covers 9,233 hectares on the Rio Grande Salar, in the Salta Province of Argentina located in the Lithium Triangle. The region is home to 50 percent of global lithium resources and 40 percent of world production.
- The acreage owned by Pursuit is situated within an Ni 43-101 inferred resource of 2.1 million metric tons of lithium carbonate equivalent (LCE), with an average grade of 370 milligrams per litre (mg/L) extending to a depth of 100 metres.
- Pursuit delivered a maiden JORC Inferred Mineral Resource Estimate (MRE) of 251.3 kt LCE at 351 mg/L at the Rio Grande Sur Project. With its current Stage 1 drilling program currently underway, Pursuit is targeting a material resource upgrade in the second quarter of 2024, which will build on the recent inferred maiden resource.
- The company has commenced the first phase of operations to produce lithium carbonate at its recently commissioned pilot plant, which is expected to achieve an operational capacity of 250 tons per annum (tpa). This is a significant milestone in the journey to advance toward the first production at Rio Grande Sur.
- Despite temporary fluctuations in lithium carbonate prices, the market continues to demonstrate resilience, with long-term projections indicating a significant 225 percent surge to reach 2.6 million tons of LCE worldwide by 2030.
Key Project
Rio Grande Sur Lithium Project
The Rio Grande Sur is the company’s flagship lithium project. The project comprises five tenements that span 9,233 hectares and are located in Rio Grande Salar in Salta province, Argentina. The region has benefited from historical exploration that yielded an NI 43-101 resource of 2.19 Mt LCE @ 374 mg/L, at inferred category.
During Q4 2023, Pursuit announced a maiden JORC inferred mineral resource estimate of 251.3 kt LCE at 351 mg/L at the Rio Grande Sur project. Following this, Pursuit is currently undertaking a maiden drill program to upgrade the inferred resource. Stage 1 of the drill program will comprise four diamond drill holes on the southern tenements. The first two holes will be drilled at the Sal Rio II and Maria Magdelena tenements.
The drilling is anticipated to reach depths of 500 to 600 metres below surface, significantly deeper than the existing defined JORC mineral resource depth. The drilling commenced in Q1 2024, and Pursuit is targeting a material resource upgrade in the second quarter of 2024. Further drilling is expected following the completion of the Stage 1 program. The Stage 2 drilling program is anticipated to occur in the second half of 2024, after which Pursuit is targeting a feasibility study.
Management Team
Aaron Revelle – Chief Executive Officer
Aaron Revelle is a seasoned mining executive with experience in founding and developing natural resources companies. He has over 15 years of experience across a wide range of commodities and bringing them from deposits into production. He was the founder of Trilogy Minerals, which was acquired by Pursuit, and Centaur Resources, which focused on its flagship Pastos Grandes lithium project and was sold to Arena Minerals, and subsequently sold to Lithium Americas for over AU$300 million.
Peter Wall - Chairman
Peter Wall is a partner with Steinepreis Paganin, a leading law firm, and has rich experience in M&A, takeovers, recapitalizations, and reconstructions. He has significant expertise in various domains such as energy, resources, capital markets, and strategy. He is also the chairman of Minbos Resources.
Tom Eadie – Non-Executive Director
Tom Eadie is a director on the company board. He has over four decades of rich experience in the resource industry. Currently, he is the chairman of Alderan Resources and Southern Cross Gold. He was also the founding chairman of Syrah Resources.
Vito Interlandi – Company Secretary
Vito Interlandi is the managing partner at Nexia Melbourne and is responsible for corporate advisory. He has two decades of experience in finance, accounting, and capital markets and has served on the boards of several public and private companies.
This profile was written in collaboration with Couloir Capital.
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7h
Pursuit Secures Funding for $1 Million of Convertible Loan Notes
Pursuit Minerals Ltd (ASX: PUR) (“PUR”, “Pursuit” or the “Company”) is pleased to announce that it has entered into commitment letters that will secure $1 million in immediate funding for Pursuit through the issue of Loan Notes totalling (“Loan Notes”) to Pursuit. The Loan Notes will automatically convert into shares and options, subject to shareholder approval to be sought at the Company’s annual general meeting on 28 November 2024 (“AGM”).
- Pursuit has mandated Alpine Capital Pty Ltd (Alpine) to act as Lead Manager in placing $1 million of Convertible Loan Notes.
- Commitment letters for $1 million of loan notes have been received with strong support from existing shareholders and new investors.
- Pursuit has recently completed two diamond drillholes from the Stage 1 Drill Program and is currently targeting resource growth to the existing inferred JORC resource of 251.3kt LCE @ 351mg/Li1 with resutls expected over the coming weeks.
- 250tpa Pilot Plant works continue to progress toward first production of Lithium Carbonate products. Product samples to be sent to prospective off-take partners.
- Following Rio Tinto and BHP spending >$13.2 billion on Lithium and Copper projects in Argentina throughout 2024, Pursuit continues to review potential value creating acquisitions complementary to the Rio Grande Sur Project.
The principal terms of the Loan Notes are set out below.
Proceeds from the Loan Notes will be principally used by the Company to fund the ongoing works at the Rio Grande Sur Project. In particular, the Company intends to apply the funds to progressing towards first production of Lithium Carbonate from its 250tpa plant in Salta, feasibility studies for the larger commercial operation and assessment of complementary acquisitions opportunities in the critical metals’ asset classes of Lithium and Copper.
Pursuit has proceeded with this relatively small raising with a view to securing sufficient funding to enable the Company to finalise significant value creating events over the coming months, including final assay results from the DDH-2 drill hole and an expected material resource upgrade at the Rio Grande Sur Lithium Project.
Importantly, the Company’s cash burn over the next 6 to 9 months is anticipated to be significantly lower than the last 6 to 9 months following drilling activities having ceased and crews demobilised from the Rio Grande Sur Project.
In a show of support for the Company, Pursuit Chairman, Mr Peter Wall, has agreed to subscribe for Loan Notes with an aggregate face value of $30,000 (subject to shareholder approval at the AGM).
Managing Director & CEO Aaron Revelle commented,“The past months have been a transformational period for the Company as we have completed the first two diamond drill holes at the Rio Grande Sur Project. With lithium intercepts at grades above 600mg/L at DDH-1 and 500mg/L at DDH-2, the project continues to exceed expectations with potential scale.”
Following on from this success, we continue to advance our 250tpa Lithium Carbonate plant towards first production with a now significantly reduced cash burn and capital commitments lower than previous quarters. Achieving this milestone places Pursuit well in its ability to move toward a small-scale continuous operation at Rio Grande, which we believe will be viewed favourably in the heightened M&A climate in the Lithium sector.”
As the global search for new copper and critical metals discoveries intensifies, we continue to evaluate potential acquisition opportunities in both Lithium and Copper following Argentina being further validated by major miners BHP and Rio Tinto with BHP’s USD $2.1 billion acquisition of Copper assets and Rio Tinto’s USD $6.7 billion acquisition of Arcadium Lithium. Both companies are continuing to develop these projects, highlighting the potential for world-class discoveries and mines in Argentina only further complemented by the RIGI legislation implemented by the Milei Government.”
We would like to thank our existing shareholders and appreciate the support of the new Loan Note holders."
In addition, pursuant to section 254H of the Corporations Act, the Company intends to undertake a consolidation of capital of the company at a ratio of 50:1 ("Consolidation"), subject to receipt of shareholder approval at the AGM to be held at the updated time of 10am on Thursday, 28th November 2024. The consolidation will apply to all Shares, Options, Performance Rights and Performance Shares issued by the Company. Where this Consolidation results in a fraction of a Security being held, the Company will be authorised to round that fraction up to the nearest whole number.
The Consolidation is proposed by the Company to reduce its total issued capital to a more appropriate and effective capital structure and a resultant share price that is more appealing to a wider range of investors.
In accordance with Listing Rule 7.21 and 7.22 all Convertible Notes, Performance Rights and Options currently on issue by the Company be consolidated in the same ratio as Shares. The exercise price of the Convertible Notes, Performance Rights and Options will be amended in accordance with the ASX Listing Rules.
An anticipated timetable for the Consolidation is set out at the end of this announcement. Further details on the Consolidation, including the information required to be provided to shareholders of the Company under the Corporations Act 2001 (Cth) and the ASX Listing Rules will be set out in the notice of meeting.
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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10h
Top 4 Canadian Lithium Stocks of 2024
Continued surpluses in the lithium market continued weighing down prices and impeding the sector’s growth during the third quarter of 2024.
A broad consolidation prompted analysts to declare that pries have bottomed, signaling a potential recovery ahead.
According to a Sprott Insights report from late July, a lithium shortage could materialize in 2025 and will be exacerbated by the lack of new production able to ramp up quickly.
“There are currently only 101 lithium mines in the world, and even as more mines and exploration projects come online, the added supply may likely not be able to keep up with demand,” Jacob White wrote.
Demand from China alone is projected to climb by nearly 20 percent annually over the next decade.
The impact of lithium shortages may also be heightened by the low-price environment that has plagued the market in 2024.
“This is especially evident given that the current unsustainably low lithium prices have led to project curtailments and driven some miners to reduce capital expenditures and investments in future supply,” White noted. “We believe that the lithium price may have bottomed, and higher lithium prices may be necessary to incentivize the required future production.”
The Investing News Network has created an overview of the top 5 Canadian lithium stocks listed on the TSX, TSXV and CSE. This list was created on October 17, 2024, using TradingView‘s stock screener, and all data was current at that time. Only companies with market caps above C$10 million for TSX and TSXV and above C$5 million for CSE are included.
1. Q2 Metals (TSXV:QTWO)
Year-to-date gain: 408 percent
Market cap: C$174.5 million
Share price: C$1.27
Exploration firm Q2 Metals is exploring its flagship Mia lithium property in the Eeyou Istchee James Bay region of Québec, Canada. The property contains the Mia trend, which spans over 10 kilometers. Also included in Q2 Metals' portfolio is the Stellar lithium property, comprised of 77 claims and located 6 kilometers north of the Mia property.
This year, Q2 Metals has also focused on exploring the Cisco lithium property, which is situated in the same region. On February 29, the company entered into three separate option agreements to gain a 100 percent interest in Cisco, news that caused its share price to skyrocket; it reached a year-to-date high of C$0.54 on March 4. Q2 Metals closed the acquisition of Cisco in June and now wholly owns the project.
In mid-May, Q2 Metals released re-assayed results from 2023 drilling conducted at Cisco by the property's vendors. The company used the analytical method it has applied to its Mia drill cores.
“We are pleased with the positive outcome of the re-analysis of the Cisco drill results,” said Q2 Metals Vice President of Exploration Neil McCallum. “A thorough review of the quality control measures has solidified that the new results are more accurate than the original results previously announced. It’s not an unexpected change as the analytical methods now used are more accurate at higher grades above roughly 1.5 percent Li2O and we have several samples above that range.”
Later that month, the company announced the start of a summer drill program at the Cisco property. It has since released multiple significant updates, including the confirmation of eight new mineralized zones on July 8.
Company shares rose to a year-to-date high of C$1.48 on October 10, shortly after Q2 released drill results and core assays from the Cisco property. As of October 1, 17 holes covering 6,360 meters in total have been drilled.
Additionally, each drill hole encountered pegmatite with visible signs of spodumene mineralization, a key lithium-bearing mineral.
“These assays continue to validate the potential and scale of the Cisco Property as that of a larger mineralized system,” said Neil McCallum, VP exploration. “One important observation of these results is the higher-grade nature of the larger mineralized system as we test and track the system progressing to the south.”
On the corporate side, Q2 announced a C$7.5 million private placement on July 10. The placement, which was divided into two tranches, was successfully closed on August 9, 2024.
2. Volt Lithium (TSXV:VLT)
Year-to-date gains: 78.26 percent
Market cap: C$57.44 million
Share price: C$0.41
Volt Lithium is a lithium development and technology company aiming to become a premier North American lithium producer utilizing its unique technology to extract lithium from oilfield brine.
Shares of Volt reached a year-to-date high of C$0.49 on September 26.
On April 29, Volt announced a strategic investment of US$1.5 million by an unnamed company operating in the Delaware Basin in West Texas. This investment is earmarked for the deployment of a field unit to produce lithium hydroxide monohydrate using Volt's proprietary direct lithium extraction technology.
The company's share price retreated in the second half of Q2, but July 17 news that Volt increased its processing capacity at its operations in Alberta, Canada, by 100 fold to 96,000 liters per day caused its price to shoot up more than C$0.08 during trading that day.
An August announcement from Volt highlighted the deployment and subsequent production scale up of Volt’s DLE technology in the Permian Basin. The field unit has the capacity to process 200,000 liters (1,250 barrels) of oilfield brine per day on location in West Texas.
3. Lithium Chile (TSXV:LITH)
Year-to-date gains: 30.19 percent
Market cap: C$140.03 million
Share price: C$0.69
South America-focused Lithium Chile owns several lithium land packages in Chile and Argentina. Presently, the explorer is working to delineate the deposit at its Salar de Arizaro property in Argentina.
On April 9, Lithium Chile announced a 24 percent increase in the resource estimate for Salar de Arizaro. The new total for the project is 4.12 million metric tons (MT) of lithium carbonate equivalent, categorized as follows: 261,000 MT in the measured category, 2.24 million MT in the indicated category and 1.62 million MT in the inferred category.
Not long after, on April 18, the company reported the creation of two wholly owned Canadian subsidiaries — Lithium Chile 2.0 and Kairos Gold — as part of a spinout to separate its Chilean and Argentinian assets.
Lithium Chile will retain its Argentinian lithium projects, and transfer its 111,978 hectares of Chilean lithium properties to Lithium Chile 2.0 and its portfolio of gold assets in Chile to Kairos Gold.
In a July operational update for the Salar de Arizaro project the company highlighted high grade intercepts from hole ARGENTO-06.
4. Foremost Lithium (CSE:FAT)
Year-to-date gains: 10.98 percent
Market cap: C$20.88 million
Share price: C$3.74
Foremost Lithium is an exploration company with several hard rock lithium properties, which it calls the Lithium Lane projects, in the Snow Lake district of Manitoba, Canada, as well as the Lac Simard South project in Québec, Canada.
In January, Foremost received its third C$300,000 grant from the Manitoba Mineral Development Fund. The funds have been earmarked for continued exploration and drilling at the Snow Lake property.
Shares of the company hit a year-to-date high of C$4.51 in late February, when Foremost released promising intercepts from its winter drill program at its Zoro lithium project in Manitoba.
In May, the company completed the winter drill program at the Zoro project, which encompassed 21 diamond drill holes. According to the statement, the preliminary results “demonstrated the continuity of lithium mineralization along Dyke 1.”
In early June, Foremost announced plans to spin out its Winston gold-silver project in New Mexico, US, into a new wholly owned subsidiary, Rio Grande Resources. Winston includes three historic mine sites.
A mid-August release from Foremost included an update on drill activities at Zoro that highlighted strong results from three holes.
“We are pleased to announce these strong drill results, reflecting the significant upside potential in our Zoro property and in the entirety of our Lithium Lane projects,” Jason Barnard, president and CEO of Foremost, stated.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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10h
Lithium Mines in Australia (Updated 2024)
As the world’s largest lithium producer and exporter, Australia is positioned to take full advantage of demand, with many lithium mines and processing plants.
An impressive 47 percent of the world’s lithium production comes from Australia, and by 2029, the country's revenue from exporting the commodity is expected to reach a value of more than AU$10.43 billion. While prices for the battery metal have fallen off from recent highs, some experts believe that the green energy transition will allow lithium to maintain momentum well into the future.
Lithium is most often found in the mineral spodumene, from which it must be extracted, processed and refined. It is used in aluminium or magnesium alloys for applications such as building aircraft or trains, serving as a strengthening and lightening agent.
But a key use of lithium is in rechargeable batteries for electronic devices such as cell phones, cameras, laptops and, of course, electric vehicles (EVs). It is the last of these applications that has investors most excited — lithium is critical to EV production, as its unique properties help create the lightweight batteries they need to function.
Demand for EVs is on the rise as automakers bring new electric lines to market. BloombergNEF expects global passenger EV sales to increase 21 percent in 2024 to reach 16.7 million units, and 70 percent of those units are expected to be fully electric.
Currently, 80 percent of lithium consumption worldwide is attributed to rechargeable battery manufacturing, representing an excellent opportunity for Australia, the world’s top lithium producer. The nation has already seen recent successes due to the EV boom, and with analysts bullish on lithium's future, the nation is ready to capitalise on the growing market.
With all of these factors in mind, investors may be wise to look toward lithium mines in Australia.
Where are Australia's largest lithium mines?
Most of lithium resources in Australia are located in Western Australia, where there are several robust hard-rock deposits. A typical lithium deposit in Australia will have a grade of between 1 and 3 percent lithium oxide.
Lithium mined in Australia comes mainly from spodumene, though it can be found in other minerals as well, such as lepidolite. In 2023, Australia reported total output of 86,000 tonnes of lithium, above its 2022 total of 74,700 tonnes. The country’s lithium production numbers first began spiking around 2018 thanks to accelerating output from two spodumene projects launched in 2017.
Australia's lithium mines
The Australian lithium mines below are driving the country's position as the world's largest producer of the important battery metal.
The lithium mines are arranged in alphabetical order. Mine information and data is sourced from the mining database MDO. Some companies in this list report production using a fiscal year (FY) ended June 30.
1. Finniss lithium mine
Status: Temporary suspension
Operations: 1 open-pit mine and 1 lithium concentrate processing plant
FY2024 production: 95,020 tonnes spodumene concentrate
Proven and probable reserves: 9.3 million tonnes at 1.38 percent lithium oxide (Li2O)
The Finniss lithium mine, owned by Core Lithium (ASX:CXO,OTC Pink:CXOXF), is the only lithium mine on this list located outside of Western Australia. The Northern Territory-based mine produced its first spodumene lithium concentrate in February 2023.
Operations at the Grants open-pit mine as well as a final investment decision at the BP33 underground project, a potential second mine at Finniss, are both on hold as of early 2024 on a weakening outlook for lithium prices. Despite the setbacks, the company is focused on establishing Finniss as a multi-mine operation. Core is working on a restart study, which it expects to complete in the first half of calendar 2025.
2. Greenbushes lithium mine
Status: Operating
Operations: 1 open-pit mine and 4 processing plants
FY2024 production: 1.38 million tonnes spodumene concentrate
Proven and probable reserves: 179 million tonnes at 1.9 percent Li2O
The Greenbushes mine is operated by Talison Lithium, a 51/49 joint venture owned by Tianqi Lithium Energy Australia and Albemarle (NYSE:ALB). The first of the two partners is itself a 51/49 joint venture between Tianqi Lithium (SZSE:002466) and IGO (ASX:IGO,OTC Pink:IPGDF).
Launched in 1983 and processing lithium since 1985, Greenbushes is the longest continuously operated mining area in Western Australia. Since then, the Greenbushes mine has expanded greatly, and is the largest operational lithium mine globally. Currently, a third chemical plant is under construction and will have a production capacity of 500,000 tonnes of spodumene concentrate with completion anticipated in the 2025 fiscal year.
3. Kathleen Valley lithium mine
Status: Operating
Operations: Open-pit and underground mines, spodumene concentrate plant
Projected average annual production: 608,000 tonnes spodumene concentrate
Proven and probable reserves: 68.5 million tonnes at 1.54 percent Li2O
Kathleen Valley is another lithium mine newly operating in Australia. Owned by Liontown Resources (ASX:LTR,OTC Pink:LINRF), the mine came online in July 2024. It is expected to produce approximately 500,000 MT per year of spodumene concentrate by the end of Q1 2025, with an expansion planned in year six to bring its production to 700,000 MT per year.
Liontown made its first shipment of spodumene concentrate in September following the commencement of spot spodumene sales to an existing offtake customer. This inaugural shipment was comprised of 11,855 wet metric tonnes of spodumene concentrate with a weighted average concentrate grade of 5.2 percent lithium oxide.
4. Mount Cattlin lithium mine
Status: Operating
Operations: 1 open-pit mine
2023 production: 239,000 tonnes spodumene concentrate
Proven and probable reserves: 5.74 million tonnes at 1.2 percent Li2O
The Mount Cattlin mine is comprised of a pegmatite type deposit hosting both lithium and tantalum and started production in 2010. The asset is soon set to become a part of Rio Tinto's (ASX:RIO,NYSE:RIO,LSE:RIO) diverse global mining portfolio as part of the mining giant's US$6.7 billion proposed acquisition of the mine's owner Arcadium Lithium (NYSE:ALTM).
In September 2024, Allkem, a wholly owned subsidiary of Arcadium Lithium, announced plans to suspend Stage 4A waste stripping and any expansionary investment beyond Stage 3 at Mt Cattlin and place the mine into care and maintenance by the end of H1 2025 following the completion of Stage 3 mining and ore processing.
5. Mount Holland lithium mine
Status: Operating
Operations: 1 open-pit mine, 1 spodumene concentrate facility, 1 lithium hydroxide refinery
2023 production: 15,000 tonnes spodumene concentrate in Q4
Proven and probable reserves: 83.9 million tonnes at 1.57 percent lithium oxide
One major new lithium operation on the scene is the Mount Holland lithium mine, known as one of the world’s largest hard-rock deposits. It is owned by Covalent Lithium, a 50/50 joint venture between Wesfarmers (ASX:WES,OTC Pink:WFAFF) and SQM (NYSE:SQM).
Spodumene production recently began in Q4 2023, with expected annual production of 380,000 tonnes. The company's Kwinana lithium refinery is now under construction. Once the full site is online in 2025, Covalent anticipates annual production of approximately 50,000 tonnes of lithium hydroxide.
6. Mount Marion lithium mine
Status: Operating
Operations: 1 open-pit mine, 1 spodumene concentrate plant
FY2024 production: 658 million tonnes spodumene concentrate
Proven and probable reserves: 35.7 million tonnes at an average grade of 1.42 percent lithium oxide
Another key lithium mine in Australia is Mount Marion, a 50/50 joint venture between Mineral Resources (ASX:MIN,OTC Pink:MALRF) and Ganfeng Lithium (OTC Pink:GNENF,SZSE:002460,HKEX:1772), with the former as the operator. The mine is located in the Yilgarn Craton, southwest of Kalgoorlie.
The mine came online in 2017. The joint venture partners completed upgrades to Mount Marion's annual plant capacity to 900,000 tonnes in 2023. As of June 2024, underground development is now underway at Mount Marion with first production from this new phase in the mine's operations beginning by the end of 2025.
7. Pilgangoora lithium mine
Status: Operating
Operations: 1 open-pit mine and 2 spodumene concentrate plants
FY2024 production: 725,329 tonnes spodumene concentrate
Proven and probable reserves: 214 million tonnes at 1.19 percent lithium oxide
The Pilgangoora project, which is fully owned by Pilbara Minerals (ASX:PLS,OTC Pink:PILBF), is located in Western Australia’s Pilbara region, close to Port Hedland. The Pilgangoora orebody is one of the largest lithium deposits globally.
Additionally, Pilgangoora has two processing plants: the Pilgan plant, located on the northern side of the Pilgangoora area, which produces a spodumene concentrate and a tantalite concentrate; and the Ngungaju plant, located to the south, which produces a spodumene concentrate.
The project is undergoing further expansion initiatives, P680 and P1000, slated for completion in 2025 as the company aims to tap into the full potential of its lithium reserves.
Pilbara Minerals started the next stage of the Pilgangoora plant expansion in March 2023, making the decision to increase the production capacity of the Pilgangoora project by about 47 percent, from 680,000 tonnes of spodumene concentrate per annum to 1,000,000 tonnes per annum. Pilbara completed a pre-feasibility study in June 2024 showing that the expansion project could produce an average of 1.9 million tonnes of spodumene concentrate annually for the first 10 years.
8. Wodgina lithium mine
Status: Operating
Operations: 1 open-pit mine and 1 lithium hydroxide plant
FY2024 production: 424,000 tonnes spodumene concentrate and 36,768 tonnes lithium hydroxide
Proven and probable reserves: 164.6 million tonnes at 1.15 percent lithium oxide
Launched in 2017, the Wodgina mine was placed on care and maintenance a mere two years later. Mineral Resources and Albemarle created the MARBL joint venture to bring Wodgina back online as the lithium market heated back up, and it reentered production in 2022 with Mineral Resources as the operator.
Mineral Resources signed an agreement in February 2023 to increase its ownership from 40 percent to 50 percent, with Albemarle owning the remaining interest as well as a 100 percent stake in the lithium hydroxide processing plant.
Thanks to the production from both Mount Marion and Wodgina, Mineral Resources reached a new record for spodumene production shipments in its 2024 fiscal year.
This is an updated version of an article first published by the Investing News Network in 2022.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Melissa Pistilli, currently hold no direct investment interest in any company mentioned in this article.
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22 October
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.
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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.”
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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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