Alita (ASX:A40)  – formerly Alliance Mineral Assets – has become a high profile casualty of plummeting spodumene prices.

WA spodumene producers are hurting as prices fall from over $US1000 ($1,476) a tonne to well under $US600 a tonne.

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Alita, which produces lithium spodumene concentrate from the Bald Hill mine in WA, was originally targeting 180,000t of lithium concentrate production in 2019, ramping up to 240,000t in 2020.

It appointed voluntary administrators yesterday after concluding that it was “insolvent, or likely to become insolvent at some future time”.

The miner had reached an impasse during ongoing discussions between its secured creditor and other key stakeholders and lenders with respect to a $40m secured loan facility, which expires at 7pm AEST today.

On August 27, this debt was acquired by fellow miner Galaxy Resources (ASX:GXY), which was already Alita’s major shareholder after shelling out $US22.5m for 12.22 per cent of the company in May.

“Acquisition of the [US$28.8m] facility provides Galaxy with the flexibility of being the secured lender to Alita as well as being the largest equity holder,” Galaxy chief executive Simon Hay says.

“As the senior, secured creditor Galaxy can work directly with all stakeholders to examine the best possible reorganization options.”

NOW READ: An ‘avalanche’ is laying waste to lithium prices, as predicted


In other battery metals news today:

Graphite play Metals Australia (ASX:MLS) says the size and scale of the potential Lac Rainy resource in Quebec, Canada “will be substantial”.

The explorer’s latest 17 drilling program at Lac Rainy has been very successful, with each drill hole intersecting mid-grade to very high-grade graphite close to surface.

To date, 11 of the the 17 holes have ended in graphite mineralisation and remain open at depth, the company says.

“The sheer size of the potential resource coupled with the high-grade nature of the deposit and the at-surface mineralisation, suggests that we have a potentially world-class project on our hands,” says Metals Australia director Gino D’Anna.