A new deal locked away with mining heavyweight Mineral Resources has sent Lithium Australia’s share price flying this morning,
MinRes has agreed to help progress Lithium Australia’s lithium extraction technology LieNA by solely funding the development and operation of a pilot plant up to the value of $4.5 million, in addition to providing the raw materials.
The revelation saw Lithium Australia’s stock jump by more than 60 per cent to touch 5.3 cents during intraday trading, after closing at 3.3 cents on Friday. It was a sign that the market clearly resonated with the faith shown by MinRes, which has a mammoth market capitalisation of $13.5 billion, in its new project partner.
Lithium Australia will bring to the party its LieNA technology, which has the potential to recover lithium from fine and low-grade spodumene that is usually dumped as waste. The company will also manage the pilot plant’s production process.
Management says the technology has the potential to enhance lithium extraction yields by up to 50 per cent more than current market performance.
Subject to the pilot plant results, Mineral Resources and Lithium Australia will form a 50:50 joint venture (JV) to own and commercialise the LieNA technology through a licensing model. The JV plans to license the technology to third-parties at a target headline gross product royalty rate of 8 per cent.
Management says the royalty model materially expands Lithium Australia’s addressable market as it has the potential to capture a fee on all tonnage processed via any mine utilising the LieNA technology.
Lithium Australia chief executive officer Simon Linge said: “Securing a development partner is also noted as a significant step within Lithium Australia’s recently released roadmap and serves as a powerful validation of our patented technology. We are excited by the future opportunity to licence our proven highvalue technology to all existing and new lithium mines across Australia and the rest of the world.”
The JV will initially license LieNA to a bigger demonstration plant, which MinRes can elect to independently fund, develop and operate. The aim of the plant will be to extract lithium salt at a commercial scale under the licence.
Lithium Australia says MinRes is an optimal strategic partner due to the fact that it mines substantial amounts of lithium at its own operations. Initial jurisdictions for licensing LieNA include Western Australia and North America, with the potential to expand into Europe and Africa.
The company is not only aiming to convert a waste product into a valuable by-product, but also significantly reduce the input energy required for the lithium beneficiation process. LieNA uses a chemical concentration process rather than the traditional and expensive energy intensive roasting process.
And Lithium Australia seems to have a simple philosophy – if you’re going to take on a dance partner, you may as well have one that everyone else would like on their card.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Michael Philipps
