• S&P says rising battery costs will lead automakers to explore tie-ups and sharing production platforms
  • Discovery Alaska finds widespread lithium in historical Coal Creek drill core
  • Green Technology Metals’ Seymour project assays include 10.5m at 1.77% Li2O from 123.2m

 All your ASX lithium news for Thursday, May 19.

 

The price of raw materials used in batteries for EVs is rising, and battery suppliers are seeking to shield their profitability from the spike in lithium, cobalt, and nickel.

Prices of cathode materials more than doubled in the past 12 months to March 2022, and account for 60-70% of the cost of battery packs.

“The compound annual growth rate in battery demand is meanwhile seen at 30%-40% from 2022 to 2025,” S&P Global Ratings said in a report.

And the increase cost of raw materials means electric vehicle (EV) makers will be spending more on their battery supply chains – which may change the way they do business.

“On one hand, they will explore more tie-ups; and on the other, they’ll seek to widen their supplier networks and potentially cut out the middleman by directly entering the upstream supply chain,” S&P said.

“And as electric vehicles increase their presence in the market, this effort to control costs will also involve a willingness to explore different technology options over the next two years.”

 

EV makers team up for scale and cost savings

S&P reckons that automakers will opt for tie-ups to achieve economies of scale, as small-scale production is a key reason for the low profitability of EV businesses.

“To improve production efficiency, more automakers are sharing their EV production platforms,” the report said.

“Over 2023-2028, Ford Motor Co. plans to produce two EV models, with a projected volume of up to 1.2 million units, for the European market based on Volkswagen’s modular electric toolkit platform.

“General Motors Co. and Honda Motor Co. Ltd. announced in April 2022 to jointly develop affordable compact EVs, which are expected to go on sale in North America from 2027.”

EV makers are also expected to take a “stricter stance” on passing on costs, as well as seeking further cooperation with upstream players.

“China’s Contemporary Amperex Technology Co. Ltd. and LG Chem Ltd.—the world’s No. 1 and No. 2 EV battery makers respectively—have both signed billion-dollar deals with Indonesian counterparties for domestic investment to build mines-to-manufacturing supply chains over the next few years,” S&P said.

 

Here’s how ASX lithium stocks were tracking today:

Lithium stocks missing from our list? Shoot a friendly mail to [email protected]

 

Only 18 stocks were in the green today, with 26 flatlining and a whopping 79 in the red.

 

Who’s got news out today?

DISCOVERY ALASKA (ASX:DAF)

A comprehensive data review has identified widespread lithium mineralisation within  historical Coal Creek drill core in Alaska.

The company believes that lithium has never been assayed at the Coal Creek prospect, where multiple drill programs have been conducted over the past 40 years, and the majority of drill core from these campaigns – possibly over 5000m of core, is stored at the Alaska Geologic Materials Center warehouse, and available for the Company to utilise.

The core provides a high quality dataset at a fraction of the original exploration cost and time required to conduct such drilling.

Re-analysis work of drill core is currently in progress, with 12 drill-holes selected as initial priority for lithium assessment works.

 

GREEN TECHNOLOGY METALS (ASX:GT1)

The company has received assays for further seven holes from Phase 1 step-out diamond drilling of North Aubry deposit at the Seymour Lithium Project in Canada, with results including 10.5m at 1.77% Li2O from 123.2m (including 7m at 2.11% Li2O).

Plus, one hole intercepted 10.7m of pegmatite with significant visible spodumene (assays pending), extending the known North Aubry pegmatite a further 150m down-dip.

An updated mineral resource estimate for Seymour – currently 4.8 Mt at 1.25% Li2O1 – is on track for completion during Q2 CY2022.

 

LATIN RESOURCES (ASX:LRS)

The company has kicked off a 25,000m systematic resource definition diamond drilling program at the Colina prospect at its Bananal project in Brazil – where previous drilling has returned thick high-grade lithium with results up to 3.22% Li2O.

And the first hold has already intersected a 27.78m pegmatite with a central core of over 21m logged with significant >20% spodumene.

The company has also begun an initial three hole drill program at the Monte Alto Prospect.

 DAF, GT1 and LRS share prices

 

 

GLOBAL LITHIUM RESOURCES (ASX:GL1)

GL1 is gearing up for its maiden 20,000m RC drilling campaign at the Manna project, with a contractor mobilised to site.

The project hosts a maiden inferred mineral resource of 9.9Mt at 1.14% Li2O, the company anticipates a mineral resource update will follow the drilling program along with additional metallurgical test work in Q4 2022.

 

FIRETAIL RESOURCES (ASX:FTL)

The freshly listed company has just completed a reconnaissance site trip to its Yalgoo project, with high priority target areas identified.

“On the back of the $8.25m capital raising, the Firetail team has hit the ground running and are well advanced in our preparations and site activities remain on track to commence in the coming weeks,” executive chairman Brett Grosvenor said.

Surface litho-structural mapping and auger geochemical sampling programs are set to commence early next month.

 

BRYAH RESOURCES (ASX:BYH)

Bryah is selling 51% of its non-core Lake Johnston lithium-nickel project to Mining Green Metals.

The company will retain exposure to any upside in the project through its remaining 49% interest in the endeavour, which consists of eight exploration licence applications covering 690km2 close to the Mount Holland lithium mine and the historical Maggie Hays/Emily Ann nickel deposits.

“The Lake Johnston tenements are prospective for battery metals lithium and nickel and the Bryah team has completed reconnaissance to follow-up on existing data and geological mapping,” chief executive officer Ashley Jones said.

“The Lake Johnston assets deserve a dedicated exploration effort and team, which will be able to be provided by inclusion in a company with the technical, human, and financial resources to advance these exciting assets.”

 GL1, FTL and BYH share price charts