Askari Metals has sealed a $2.5 million strategic equity investment by global battery materials supplier Huayou International Resources, with the funds to be used to turbocharge lithium exploration at its Uis project in Namibia.
Management says it has issued Huayou 4.5 million fully-paid ordinary shares at an issue price of 55 cents, in addition to 1.5 million free attaching options. The shares are all subject to a 12-month voluntary escrow period, while the options are freely-tradeable.
Zhejiang Huayou Cobalt is the ultimate holding company of Huayou and is described as a tier-one global lithium battery and cobalt materials supplier. The company is listed on the Shanghai Stock Exchange with a market capitalisation of a bulging $18 billion.
Huayou intends to grow its stake in Askari to 9.9 per cent and will have the option to appoint a member to the company’s board at that point. It will also support Askari through the provision of technical input and guidance for continued exploration, development and mine construction, in addition to downstream lithium processing.
Askari Metals executive director Gino D’Anna said: “We are delighted the Strategic Investment with Huayou has completed. The name Huayou is synonymous with the cobalt and lithium sector not only in China, but globally, and we welcome Huayou to the register. We look forward to keeping our shareholders and investors updated as we continue to explore and develop the Uis Lithium Project.”
Zhejiang Huayou Cobalt has four major business segments, which include the development and refining of nickel, cobalt and lithium battery metals, production of precursors and ternary cathode materials and the recycling of battery materials.
Huayou has rich experience in mine construction and operation, including at two copper and cobalt projects in the Democratic Republic of Congo, with an annual production of 100,000 tonnes cathode copper and 10,000 tonnes cobalt. It has invested in three nickel and cobalt projects in Indonesia with an expected annual production of 225,000 tonnes of nickel and 23,000 tonnes of cobalt by next year.
Askari’s Uis lithium project covers 308 square kilometres in a highly-mineralised, spodumene-rich pegmatite belt with a history of prior production and exploration success. The company says its project holds exceptional potential, as identified by due diligence sample results and a high number of pegmatites exposed at the surface, ranging from a few meters in width to more than 50m wide.
Many of the pegmatites have been mined historically for tin and semi-precious stones and altered spodumene and lepidolite are visible within the workings and in the mined rock around them.
The project sits less than 5km from the township of Uis and less than 2.5km from Andrada’s operating lithium-tin-tantalum mine in west-central Namibia. Andrada’s Uis mine has resources of 81 million tonnes at 0.73 per cent lithium oxide, 0.15 per cent tin and 0.14 per cent rubidium. It gives the mine a total resource metal content of 1.45 million tonnes lithium carbonate equivalent, 120,000 tonnes of tin metal and 109,400 tonnes of rubidium with substantial tantalum.
Andrada believes its mine is world-class and expects to eventually expand its resources to about 200 million tonnes.
Askari purchased about a third of its ground last month and during its due diligence work, it sampled various pegmatite outcrops. Assays identified high-grade lithium, tin, tantalum and rubidium up to 2.11 per cent lithium oxide, 1.3 per cent tin, 658 parts per million tantalum and 4214ppm rubidium.
The work also identified several types of pegmatite, including those hosting lithium-caesium-tantalum and caesium-depleted pegmatites that have more correlation with tin and tantalum.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Steve Kaless
