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SQM to join Talga in Swedish Lithium Project
June 20, 2024
Battery materials and technology company Talga Group Ltd (“Talga” or “the Company”) (ASX:TLG) is pleased to announce that it has entered into an Earn-in Agreement (“Agreement”) with world- leading lithium miner and producer Sociedad Química y Minera de Chile S.A. (via its subsidiary SQM Australia Pty Ltd) (“SQM”) (NYSE:SQM; SSE:SQM-B, SQM-A), over Talga’s Aero Lithium Project (“Aero”) in Sweden.
- Earn-in Agreement signed with SQM, world-leading lithium miner and producer, over Talga’s 100% owned Aero Lithium Project located ~30km east of Gällivare in northern Sweden
- SQM can earn up to 70% interest in Aero JV in stages for total US$19.0m expenditure
- Talga to manage project during earn-in period and retain 100% graphite rights
Under the binding Agreement, Talga has granted SQM the right to sole fund exploration expenditure of up to US$19.0m over the next 7 years on Aero for up to a 70% ownership interest in the project. Talga also will be paid a management fee for each stage of the potential earn-in arrangement, and a success fee if a decision to mine on Aero is made. Talga retains all rights and obligations in relation to graphite minerals within Aero.
SQM has completed extensive due diligence on Aero including site visits, and under the Agreement the parties may agree to collaborate on potential new lithium areas and projects in Sweden. The Agreement is subject to Swedish foreign direct investment clearance. Key terms of the Agreement are set out in Schedule 1 to this announcement.
Project background
Aero forms part of Talga’s suite of battery metal assets separate to its advanced stage Li-ion battery graphite anode business (“Vittangi Anode Project”). Aero covers 270km2 area south and east from Gällivare where Talga has found lithium-prospective pegmatites over ~50km total strike with surface sample results up to 1.9% Li2O (ASX:TLG 29 August 2023). Lithium is classified as a strategic raw material and subject to domestic extraction targets under the EU Critical Raw Materials Act.
Talga Managing Director, Mark Thompson, commented: “We are delighted to partner with SQM on our Aero lithium project in Sweden, which provides an important chance to build a European lithium supply for the green transition and EU localisation objectives.
As one of the few potentially large-scale lithium hard rock opportunities in Europe, Aero might be significant to the region’s battery and electric vehicle industry.”
SQM International Lithium division CEO, Mark Fones, commented: "We are pleased to enter into this agreement, which represents our dedicated efforts to build a global and competitive lithium asset portfolio. Expanding into new and promising jurisdictions, such as Sweden, has been a strategic goal for us, and partnering with Talga, who has demonstrated expertise in the region, further enhances this achievement.”
Click here for the full ASX Release
This article includes content from Talga Group, 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.
19h
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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21h
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
Raiden Raising AU$10 Million to Expand Drilling at Andover South Lithium Project
Raiden Resources (ASX:RDN) said it has received firm commitments from various investors to raise AU$10 million to accelerate and expand drilling at the Andover South project in Western Australia's Pilbara area.
The amount will be raised via a placement of 312.5 million shares issued at AU$0.32 each; that represents a 17.9 percent discount to the last traded price of AU$0.39 for Raiden shares on October 9.
The company had initially planned a 5,000 metre diamond drill program at lithium-focused Andover South, but will now expand it to 15,000 metres. Its decision comes after receiving results from the first five holes.
“The decision to conduct the placement and expand the drill program was made after the company’s geologists (who previously worked on Azure Minerals Limited’s Andover lithium discovery) identified additional high-grade drill targets within the Andover South Project area,” Raiden said in a press release on Monday (October 14).
Andover South has seven target zones, and the AU$10 million to be raised will enable the company to look at target areas one and two at greater depths, while also covering target area seven.
Target area seven has similar fractionation rates to the pegmatites discovered in target areas one and two.
"With additional drill rigs about to be mobilised, we anticipate that the Company will be in a position to generate regular news flow once the results are received from the laboratory," said Managing Director Dusko Ljubojevic.
Raiden secured an 80 percent interest in the Andover South project in August 2023 under a binding agreement with vendor Welcome Exploration. Drilling at the project commenced in September.
A second diamond drill rig is due to arrive this week, with ongoing planning to bring on further drill rigs as required.
The placement shares are expected to be allotted on or around Thursday (October 17).
Don’t forget to follow us @INN_Australia for real-time news updates!
Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.
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16 October
Entitlement Offer Fully Subscribed
Galan Lithium Limited (ASX: GLN) (Galan or the Company) is pleased to announce that its entitlement offer closed fully subscribed. The pro-rata non-renounceable entitlement offer of one (1) new fully paid ordinary share for every four (4) fully paid ordinary shares held by eligible shareholders at the record date of 13 September 2024, at an issue price of $0.105 per share (Entitlement Offer) raised $13.3 million (before fees). The Entitlement Offer was extended by one week and closed on 10 October 2024 (Closing Date).
The Entitlement Offer was well supported by Eligible Shareholders who applied for 60,198,783 shares plus all of the shortfall offer of 66,468,031 shares.
The Company advises that the results of the Entitlement Offer were as follows:
Shares | Proceeds | |
Total number of shares offered under the Entitlement Offer | 126,666,814 | $13,300,015 |
Total number of shares applied for by Eligible Shareholders under the Entitlement Offer | 60,198,783 | $6,320,872 |
Total number of shortfall shares applied for by Eligible Shareholders under the Entitlement Offer | 66,468,031 | $6,979,143 |
TotalSharestobeissuedunderthe Entitlement Offer | 126,666,814 | $13,300,015 |
The shares under the Entitlement Offer will be issued on 17 October 2024.
Galan’s Managing Director, Juan Pablo (JP) Vargas de la Vega, commented:
“On behalf of the Board, I’d like to sincerely thank our shareholders for their continued support to achieve this outstanding result. To raise $13.3 m in a challenging market is strong validation of Galan’s HMW project in Argentina.
Galan continues to move forward with the development of HMW and remains upbeat about the future of the lithium market.”
The Galan Board has authorised this release.
Click here for the full ASX Release
This article includes content from Galan Lithium, 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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