Eye on Lithium: Future lithium supply to be dominated by Aussie, US spodumene and Latin American brines, Macquarie says
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All your ASX lithium news for Monday, March 28.
Despite POSCO putting direct lithium extraction (DLE) in the spotlight with its announcement of a US$4B investment in a new mine in Argentina, Macquarie reckons supply will continue to be “dominated” by Aussie and US spodumene (hard rock) and Argentinean and Chilean brine.
Quick refresher – DLE is an extraction technology that targets the removal of lithium from brine without the need for evaporation ponds. It is supposed to be cheaper, provide a better product, and be more environmentally friendly than the alternative.
“Despite the development in DLE production, we expect lithium supply to continue dominated by spodumene from Australia and the US and conventional brine volumes from Argentina and Chile,” Macquarie said.’
Notably, spodumene prices edged higher last week to US$2,810/t, while Chinese lithium carbonate prices remained flat.
Macquarie also said it’s a fan of Pilbara Minerals’ (ASX:PLS) which recently announcing its first $114m profit for the first half of 2022 – from a statutory loss of $21.2m a year earlier.
“Our preference for Australian based producers remains unchanged with PLS our key pick which offers strong near-term production growth.
“Alkem (ASX:AKE) offers unique exposure to both lithium brine in South America and spodumene production in Australia.”
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A total of 25 stocks were in the green today, with 24 flatlining and 53 in the red.
The company has identified a strong 4km by 2km lithium soil anomaly at its Bolt Cutter project, 34km north of PLS’s Pilgangoora deposit.
“To identify an anomaly, from the first systematic sampling ever completed in the area, that is large enough to contain a target of a comparable scale as two significant lithium projects along trend is very promising,” CEO Samuel Ekins said.
“We will commence follow-up field work immediately.”
All conditions precedent for Ganfeng’s investment into the Goulamina Project have now been met following transfer of the Goulamina Exploitation Licence.
This now triggers the US$130 million to be delivered to the JV company – which FFX and Ganfeng hold 50% each of – with US$39 million in funding to be released from escrow to the JV company and a further US$91 million to be transferred by Ganfeng in the coming days.
Ganfeng will also be required to provide a further US$40 million in Ganfeng debt or source US$64 million in third party debt.
Gold focused Firefinch will now proceed with the demerger of Goulamina into Leo Lithium, which is expected to list on the ASX in the near future.
The company has exercised its right to acquire a further 29% interest in the Ontario Lithium Projects in Canada. This will take GT1’s Joint Venture (JV) interest in the OLP to 80% (from its current 51%).
“With concurrent Phase 2 (Central Aubry zone) and Phase 3 (Pye prospect) drilling programs underway at our flagship Seymour Project, and a mineral resource update on track for Q2 2022, GT1 continues to rapidly progress its plans to become the preeminent vertically integrated lithium company in Ontario,” GT1 CEO Luke Cox said.
Ardiden (ASX:ADV) holds the other 20% which it said allows the company to retain exposure while focusing on its gold projects.
This week Anson plans to kick off resource expansion drilling at its Paradox lithium brine project in Utah, USA.
The drilling is initially targeting the Long Canyon No.2 (LC2) well which the company says has the potential to deliver a significant increase to the Paradox resource – which will support a Details Feasibility Study (DFS) for the project.
Notably, the highest lithium value reported to date (253ppm Li) was recorded in this well.
The Ministry of Mines and Energy, Republic of Namibia has granted Lepidico an Accessory Works Permit for the development of its Karibib lithium operations, with construction work scheduled to start in the September 2022 quarter.
All Stage 1 works including the Front End Engineering and Design (FEED) have been completed, and the company’s board has also approved A$1.2 million of Stage 2 EPCM works to be funded from existing working capital in parallel with completion of the FEED works for the chemical conversion plant to be located in Abu Dhabi.
These works remain on schedule for completion in June.
The company has invested US$500k in fast-charging vanadium-based lithium battery start-up, Tyfast, a spin-out from the University of California San Diego.
Tyfast is targeting the production of battery cells that reduce charging times by 20-fold (down to 3 minutes), extending battery life-cycle by 20-fold (up to 20,000 cycles) and maintaining the high energy density found in state-of-the-art lithium-ion batteries.
The start-up aims to use the US$1m its raised to scale up commercialisation activities for this breakthrough battery technology and is also developing its vanadium technology to be a drop-in replacement for standard-graphite anodes in lithium-ion battery manufacturing – to allow direct integration into existing manufacturing lines for rapid commercialisation.
The explorer says there’ll be a “slight delay” in reporting the mineral resource estimate (MRE) update for its Reung Kiet project in Thailand due to increasing assay backlogs at all testing laboratories – plus the company’s decision to include its latest extensional drilling results.
PAM emphasised that the delay is not to do with the project, its geology or its mineralogy.
The MRE is now due in mid-May.