Eye on Lithium: Lithium price run just getting started, Citi says
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All your lithium news, Monday, May 22.
Citi analysts are confident lithium prices will continue their run, citing that downstream producers are starting to restock their wares and policy changes in China will light another fire under EV sales growth.
While not a perfect representation of prices (most lithium is sold under contract) spot lithium has rebounded from a 19-month low of US$22,000/t in April to about US$28,000/t this week.
Meanwhile South Korean resources major POSCO says that Australia stands to lose downstream lithium processing projects to neighbouring countries, with investment cost per tonne in Korea about 40% lower than Australia’s own Kwinana and Kemerton processing projects in WA.
Korea also had superior infrastructure and procurement of auxiliary materials, it says.
POSCO secured a $693m loan to construct a lithium plant in South Korea to process about a third of Pilbara Minerals’ (ASX:PLS) 1 million tonnes per annum expected production capacity of lithium spodumene. PLS also holds an 18% stake in the project.
In other news, Indian resources major NMDC is meeting with the WA Government and Hancock Prospecting as it looks to partner up with the latter on lithium projects in the state.
India’s government seeks to upscale the mining and processing of battery metals to meet expected increases in EV uptake in its own country.
Indian prime minister Nahendra Modi ambitiously said that he wants EV’s to account for 30% of car sales by 2030 – up from just 1% today.
Just 34 lithium stocks were up today after an expected fall right across the board for the ASX, while 50 remained flat and 64 dropped in price.
Galan Lithium has raised $31.5m to progress the development of its lithium projects in Argentina and Western Australia.
The funds will be used for exploration and production expansion studies at its Greenbushes lithium project, as well as long-lead items for an LCE pilot plant and Stage 2 DFS at its Hombre Muerto West brine project.
Under the placement, Galan will issue 30 million new fully paid shares at $1.05 to institutional and sophisticated investors, which is a 12.5% discount on its last closing price of $1.20.
In addition, Galan intends to undertake a share purchase plan to raise another $5m from eligible shareholders.
Galan MD Juan Pablo Vargas de la Vega said it was an exciting time to be involved in the Galan story.
“I wish to thank all the placement participants, old and new, who have strongly supported the Galan production plan that will take it from an initial smaller scale lithium producer to a big 60ktpa player,” Vargas de la Vega said.
“I also encourage all our loyal shareholders to get on board and participate in the entitlement issue which will get underway later this week.”
News to the market today shot a rocket under Osmond Resources’ share price after it announced it has procured the rights to farm-in and buy the Salt Wells lithium-borate project in Nevada, US.
The project consists of 276 mineral claims covering 36km2, with surface samples in the north of the area recording up to 810 parts per million (ppm) lithium and 1% boron.
The project is subject to an earn-in agreement between 5E and Great Basin Resources, in which 5E has exclusive rights to. Osmond will assume 5E’s obligations for an 80% interest in the project with limited rights to buy up to 100%.
The explorer said it will initially look at existing geophysical data to design and initiate an exploration program, potentially drilling in the second half of this year.
After signing an MOU last week to build a lithium plant in Vietnam, PAM has released positive assays from its Reung Kiet lithium project in southern Thailand.
The assays demonstrate further extensions at depth, with 11.5m @ 0.95% Li2O, 0.05% tin and 171ppm of tantalum pentoxide, as well as 11m @ 0.66% Li2O, 0.11% tin and 137ppm tantalum and 14.7m @ 0.78% Li2O, 0.1% tin and 138ppm tantalum.
PAM director Paul Lock said they have now concluded the infill and extensional drilling program for the time being which will allow for the completion of the mineral resource expected in June.
“Once the mineral resource upgrade has been completed then mining studies can commence for incorporation into the PFS and a Mining License application, which will be submitted this year.”
The explorer has now turned its drill rigs’ attention to the Bang I Tum prospect where it will evaluate existing targets.
“We are excited that drilling has commenced at the Bang I Tum prospect, which could potentially have a larger inventory and / or higher grades than the Reung Kiet Lithium Prospect based on the current Exploration Target,” Lock said.
“This all bodes well given our recently reported ore sorting, beneficiation and preliminary chemical testwork to produce lithium carbonate.
“We are looking forward to receiving assay results from the Bang I Tum drilling program.”
PAM looks to become a major player in a fledgling lithium scene in South East Asia and said that once the mineral resource estimate is complete it will conduct mining studies for a pre-feasibility study and mining license application.
At Stockhead we tell it like it is. While Galan Lithium is a Stockhead advertiser, it did not sponsor this article.