Arizona expands US lithium exposure through US$1.25m investment in Midwest

Arizona Lithium is increasing its exposure to lithium assets through a strategic equity investment of US$1.25m ($1.95m) in South Dakota-focused Midwest Lithium AG.

The investment grants the company a 11.5% stake and a board position in Midwest, which has a significant land position in South Dakota’s Black Hills region – one of North America’s proven hard rock spodumene lithium producing districts.

Arizona Lithium (ASX:AZL), whose US-based executive director Matthew Blumberg will fill the position on Midwest’s board, will lend its experience in US lithium exploration and from the recently established Lithium Research Centre (LRC) to its investee company.

Its investment is part of a broader US$2.5m capital raising Midwest is currently completing to fund surface exploration, ground expansions, property acquisition and permitting.

Black Hills and Midwest

The Black Hills district holds over 24,000 pegmatite bodies located around a large local granitic intrusion known as the Harney Peak Granite of which between 2% and 5% are believed to carry lithium mineralisation.

Visible spodumene and other lithium minerals are easily identified around the district, which is home to a number of historical mines and some of the first spodumene processing plants worldwide proving that spodumene in the region can be easily extracted through conventional DMS and flotation methods.

But lithium isn’t all that Black Hills is known for. The region also has a rich mining background and is home to several large-scale mines including the giant Homestake mine that produced over 40Moz of gold over its continuous mine life of more than 125 years.

At least two other Australian companies – ASX-listed Iris Metals and Patriot Lithium, which is looking to raise up to $10m through an ASX listing – are active in the Black Hills and Arizona Lithium is also looking for opportunities to develop projects on a similar time line to its Big Sandy project in Arizona.

Midwest is currently consolidating its land position and has already started mapping and geochemical programs in order to define drill targets to be pursued when drilling permits are granted.

LRC benefits

While Arizona’s LRC, which is hosted on a 9,700m2 property in Tempe, will function primarily as the analytical centre for the Big Sandy project, it will also have the ability to function as a technology incubator focused on the extraction of lithium from a variety of ores and brines.

Once lithium extraction is successfully tested, production of battery grade lithium chemicals for current and future battery technologies will be undertaken at the LRC.

This will allow the company to cherry pick project investments and/or acquisition opportunities in North America.

Midwest will also be able to benefit from the use of the research centre.

This article was developed in collaboration with Arizona Lithium (ASX:AZL), a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.