Crusader plans potential lithium spin-off as it shifts attention to gold
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While others are madly scrambling to break into the lucrative lithium market, Crusader Resources is heading in the other direction.
The company (ASX:CAS) previously acquired lithium assets in Brazil and Portugal, but is now thinking of focusing on gold.
“We just published some numbers last week on one of our two gold projects with an NPV [net present value] that is six times higher than our current share price — and that is only one of the projects,” executive director Paul Stephen told Stockhead.
“I would almost argue that the other [gold] project is worth at least as much. Certainly, in our minds it is.
“So what we’ve got is a situation where we feel we’ve got to focus on gold and deliver those results for shareholders.
“That doesn’t mean we don’t like lithium or the electric vehicle space. In fact I think that South America and Brazil are going to be a power player in the electric vehicle and battery market.”
South America’s “lithium triangle” extends through Chile, Argentina and Bolivia and hosts over half the world’s lithium resources.
Lithium is among the hotly touted battery metals that are expected to witness strong demand from the growing electric vehicle market.
Electric cars are forecast to account for 20 per cent of the market by 2030, rising from an estimated 2 per cent market share in 2020.
Crusader recently completed negotiations with the Portuguese government for the granting of the Gaia lithium exploration licence.
The company also owns the Manga project located in the north-east of central Brazil where rock chip samples have returned grades of up to 1.8 per cent lithium oxide.
Crusader is considering all its options, including a potential spin-off, farm-out or complete divestment.
“We see a real value in creating those focused vehicles, so we are going to put some effort into it,” Mr Stephen said. “We’re not excluding any option at this point in time.”
Crusader wants to see a “serious uplift in value”. In the past nine months, Crusader shares have lost more than half their value, slumping to 6.1c from a 52-week high of 13c.
Crusader is also working toward a secondary listing on London’s AIM market.