Eye on Lithium: Leaders getting in on the act to secure supply

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• German Chancellor Olaf Scholz has lithium on the mind with Latin America visit
• Chile, Bolivia keen to retain as much of lithium profits as possible
• Liontown starts open pit mining at Kathleen Valley

All your lithium news, Friday February 3.

The scramble for lithium resources is turning personal with German Chancellor Olaf Scholz making use of his visit to Latin America this week to lobby for additional supplies of lithium for his country’s automotive industry.

His visit follows Chinese President Xi Jinping’s address to the Summit of the Community of Latin American and Caribbean States last month, which highlighted the importance of China’s relationships in the region and pledged continued support for industrial partnerships.

While China has the lead in securing supplies from South America, Schloz is reported to be counting on helping countries such as Chile locate more of the lithium-ion battery manufacturing process locally, which will increase the value they receive from their resources, while reducing their impact on the environment.

Doing so will also cut down on China’s involvement in the battery manufacturing process given its dominance into the processing of raw lithium concentrates into lithium chemicals.

It is also the type of appeal that could resonate with Chile at least, given President Gabriel Boric’s focus on reigning in mining companies and interest in reorganising the country’s lithium industry by creating a national lithium company through various treaty mechanisms.

Scholz could also find a receptive ear in Bolivia, which, despite having a quarter of the world’s lithium resources, has little processing capability and is keen to change the sorry state of affairs.

Bolivian President Luis Acre, who nationalised the country’s hydrocarbon industry during his time as the Minister of Finance, is keen to keep the potential profits from lithium exports within Bolivia.

Here’s how ASX lithium stocks are tracking:

The nays outnumbered the yays today with 49 stocks in the red while just 37 lithium plays recorded positive results today, leaving 51 companies unchanged.

Who’s got news out?

Liontown Resources (ASX:LTR)

Liontown’s dream of becoming Australia’s next lithium producer is well and truly underway with the on-schedule start of open pit mining operations at its Kathleen Valley project in Western Australia.

The mining of the Mt Mann open pit will generate material for construction of the Run-of-Mine pad and Tailings Storage Facility, potential Direct Shipping Ore (DSO) and a stockpile of mill feed to facilitate the start-up commissioning, and ramp up of the process plant, with first production on schedule for mid-2024.

Additionally, recent mine plan optimisation work has reduced the operational complexity of the mine plan from both an open pit and underground mining perspective.

The company will now expand the Kathleen’s Corner open pit to produce more ore than estimated in the Definitive Feasibility Study while reducing Mt Mann to a large box-cut before establishing the underground portal and subsequent decline development.

It noted that the expansion of Kathleen’s Corner will result in more material being moved over the initial project period, which given strong market conditions offers a potential opportunity to monetise material not previously expected to be processed as a DSO product.

Doing so could deliver early revenue during the pre- and post-commissioning phase at Kathleen Valley.

Winsome Resources (ASX:WR1)

Winsome is raising up to $60m through a combination of a flow-through shares placement, an institutional placement and share purchase plan to accelerate its Canadian lithium projects.

The company will raise $19m through the placement of shares priced at $4.18 each – a 79% premium to its last closing price – using FTS provisions under Canadian tax law, which significantly minimise the dilution of issued capital.

These FTS shares will be be immediately sold on through a block-trade agreement to select high-quality domestic and offshore institutional investors.

Winsome will also raise a further $31m through a placement of shares priced at $2 each and offer existing shareholders up to $10m worth of shares.

Proceeds will be used to further ramp up exploration and resource drilling activities at Cancet and Adina as the company works towards announcing maiden resources.

Cullen Resources (ASX:CUL)

Soil and rock chip sampling at the company’s Barlee project in Western Australia have outlined several high-priority geochemical targets for lithium over about 6km of strike.

Assays of the soil sampling showed coincident lithium-caesium-niobium-tin-tantalum-rubidium anomalies over a large target trend with a top lithium assay of 261 parts per million while rock chips of pegmatites and granites within this target trend returned a top result of 2,859ppm lithium.

Reconnaissance air core drilling and further soil sampling is planned along this granite – mixed greenstone/granite target trend.

Peregrine Gold (ASX:PGD)

Reconnaissance stream sampling at Peregrine’s Pilgangoora North project has identified anomalous niobium, lithium, tantalum and gold.

The first comprehensive stream sediment sampling program at the project returned assays of up 6,356ppm niobium, 2,920ppm tantalum and 289ppm lithium.

Additionally, a recently completed rock sampling program to follow up on these results has revealed extensive exposures of pegmatites that have not been mapped previously.

The company plans to aggressively explore the project over the coming field season.

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