Infinity offloads potash play to focus on European lithium project

ASX-listed Infinity Lithium Corporation has cleared the decks of its non-core assets and is now set to focus 100% on the European market for battery-grade lithium hydroxide after reaching a binding sale agreement to divest its African potash assets. 

The divestment leaves the Perth based company to focus solely on its San Jose industrial lithium project in Spain.  

Infinity Lithium has a 75% ownership interest in the San Jose project that, according to its feasibility study is set to deliver 15,000 tonnes per annum of battery-grade lithium hydroxide in a side by side operation that will see a lithium chemicals plant built almost alongside the mine.

The company’s study shows an initial 30-year open pit mine life delivering up to US$6 billion in revenue over that period for a pre-tax NPV of US$860m, an internal, pre-tax rate of return of 42% and a pay-back of just 2.5 years.

Despite most hard rock lithium presently being exported to China, Infinity says that hard-rock lithium production will dominate the market in Europe in the years to come.

Management said that the massive San Jose project is the second largest lithium resource in the European Union and the largest open pit-based project.  The project is located in the Valhondo valley, approximately 280km west-southwest of Madrid and about half way between Madrid, Spain and Lisbon in Portugal.

Infinity Lithium has agreed to the sale of all its potash assets in Gabon, West Africa to a company called Meridian Drilling Incorporated.  Prior to the divestment it owned 100% of both the Banio potash project and an application area over the Mamana potash project in Gabon. 

The company said that in exchange for a 100 per cent interest in Infinity’s wholly owned subsidiary, Equatorial Potash which holds the Gabonese assets, Meridian will provide a waiver of any outstanding fees associated with drilling and a waiver of any costs and obligations related to demobilising of drilling equipment.

This appears to remove costs associated with the potash assets from Infinity’s obligations. Infinity Lithium also relinquished its Tungsten assets back in 2019 and is now a one project player in the rapidly growing Lithium-ion battery market.

Infinity Lithium Managing Director, Ryan Parkin said: “Infinity has previously announced its intention to divest the Gabon assets and is focussed solely on the lithium industry and the San José lithium deposit in Spain. This warrants our absolute focus and attention. Having a deal structure which can deliver real value through removing costs for Gabon allows us to add value in Spain.”

Infinity claims that its forecast of 15kt per annum of lithium hydroxide could power some 10m electric vehicles - an outstanding target to chase as the company moves toward development of its San Jose project.

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