Ground Breakers: Patriot pulls massive Albemarle investment, Rio and Glencore bag copper deals
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Patriot Battery Metals (ASX:PMT) has taken just one day after announcing it had outlined the world’s eighth biggest hard rock lithium resource to reveal the big player launching onto its register with a massive cornerstone investment.
After weeks of speculation about Pilbara Minerals (ASX:PLS) and Mineral Resources’ (ASX:MIN) growth ambitions and positions on the Patriot register it was the lithium industry’s biggest fish, America’s Albemarle, that has stumped up C$109 million to take a 4.9% stake in the emerging market darling.
The investment came in at a 10% premium to Patriot’s 10-day VWAP, at a price of C$15.29 per share.
It has sent the company’s Australian CDIs soaring this morning, clocking in at a 10.73% gain this morning to $1.67.
Patriot’s maiden resource at the CV5 pegmatite at its Corvette lithium property in Quebec’s hot James Bay region clocked in at 109Mt at 1.42% Li2O at a 0.4% Li2O cut-off and US$1500/t spodumene price.
The 6% lithium concentrate, the product sold from WA’s world-leading spodumene mines which accounts for over 50% of the lithium raw materials in the global market, is currently trading on spot levels for more than US$3500/t having risen as high as US$8500/t late last year.
But the company says it could identify further resources outside the 3.7km long CV5 pegmatite both within that system and along a number of other targets across a 20km long belt controlled by the explorer, which has seen a number of nearology plays also set up shop on ground nearby by following its recent exploration success.
“We could not be more pleased to have welcomed Albemarle to invest in Patriot. I believe both Patriot and Albemarle can be a big part of building out the required front-end to the lithium chemicals supply chain in North America and Europe over the coming years,” Patriot president and CEO Blair Way said.
“The additional funding will allow us to more aggressively advance the Corvette Property through drilling, permitting, study work and more.”
The deal also includes an MoU with a nine-month exclusivity period to investigate partnership opportunities to study a potential lithium hydroxide plant integrated with Corvette to be based in either the US or Canada.
It is the latest M & A move in the lithium space, which has seen a flurry of activity as the industry’s big boys consolidate and position themselves for an explosion in electric vehicle demand later this decade.
Albemarle was knocked back earlier this year in a $5.5 billion bid for WA lithium developer Liontown Resources (ASX:LTR), an offer which showed how desperate the majors were to get their hands on additional tonnes.
Its biggest rival SQM made a $20 million investment in Azure Minerals (ASX:AZS), which has made what could be a large pegmatite discovery near Port Hedland in WA’s famous Pilbara region, while Japanese trading house Idemitsu Kosan made a $46 million investment for a cornerstone stake in Delta Lithium (ASX:DLI).
Legendary gold executive Bill Beament also announced his move into the lithium space with a $152 million scrip deal to acquire Pioneer Dome lithium project owner Essential Metals (ASX:ESS).
The biggest deal of all was the planned merger at a combined value of $16 billion of US-based Livent and ASX-listed Allkem (ASX:AKE), which will create the world’s third biggest lithium carbonate equivalent producer.
Albemarle VP of lithium resources Alexander Thompson said the focus would now be on working together with the Ken Brinsden-chaired Patriot.
“We look forward to collaborating with Patriot to better understand the Corvette property and the opportunities this project represents for the North American battery materials supply chain,” he said.
The whole battery metals sector rose on the ASX today, including fellow Canadian miner Sayona (ASX:SYA), which revealed it had lifted concentrate production by 744% QoQ to 29,610t at its North American Lithium operations in Quebec in the June quarter.
Its first shipment is due this quarter.
Pan American Silver has found the perfect buyers for its unwanted copper assets, with Rio Tinto (ASX:RIO) dropping US$45 million to take a 57.74% stake in the Agua de la Falda exploration site in Chile, along with 100% of the nearby Meridian Property concessions for $550,000.
It brings Rio Tinto into direct partnership with the Chilean Government. Its mining arm, the world’s largest copper producer Codelco, holds the other 42.26% and follows an underground mining collaboration agreement signed by Rio and Codelco in October last year.
Rio will bring a new focus to the ground, previously combed through by Pan American for its precious metals potential.
“Copper is critical for the global energy transition, which is at the heart of Rio Tinto’s strategy, and Chile is one of the most important sources of world supply as demand for copper in renewables and electrification grows,” Rio CEO Jakob Stausholm said.
“Partnerships are essential to find better ways to provide materials the world needs, and we are pleased we can bring our global exploration capability to a joint venture that will be able to access Codelco’s strong local presence and industry expertise.
“Although this is an early-stage exploration project, we are very excited to be actively exploring in Chile in partnership with Codelco.”
Glencore also has claimed a prize from the TSX-listed precious metals player, paying US$475 million for the controlling stake in the MARA copper project in Argentina’s Catamarca province.
Containing 5.4Mt copper and 7.4Moz of gold, with an initial mine life of 27 years, MARA was one of the assets picked up by Pan American in its carve up with Agnico Eagle of the old Yamana Gold business after a takeover war with South Africa’s Gold Fields.
Glencore is now the sole owner of the asset, having acquired Newmont’s 18.75% stake last year.
Closer to home there was more positive news for copper investors, with prices up 2% overnight to more than US$8800/t on the release of a laundry list of Chinese economic support measures.
29Metals (ASX:29M) shares stormed almost 20% higher after announcing its Mammoth and Greenstone mines at the Capricorn copper operation in North Queensland, shut earlier this year after a major flooding event, had recommenced mining this morning.
The materials sector rose 1.01% before lunch as higher commodity prices drew buyers into the fold, with Lynas Rare Earths (ASX:LYC) the biggest mover after announcing a US$258 million support package from the US Department of Defense for a heavy rare earths separation plant in Texas.