Investors have applauded as lithium plays Lepidico and Galaxy Resources jumped into bed to commercialise an extraction and recovery technology.

Lithium giant Galaxy Resources (ASX:GXY) agreed to take a 12 per cent stake in minnow Lepidico (ASX:LPD) under a plan to develop Lepidico’s L-Max technology.

The L-Max process allows the extraction and recovery of lithium (Li) from lithium-bearing micas such as lepidolite and zinnwaldite.

Such Li-rich minerals have previously been overlooked as a source of lithium because no commercially viable process existed to recover the metal, which is essential for renewable batteries.

Under the plan, Galaxy will subscribe for $2.9 million through a private placement of 291.7 million shares at 1c per share.

Galaxy — which is valued at $1.3 billion — will assist Lepidico in future business and growth opportunities, examine potential synergies with its Mt Cattlin mine and James Bay project and access additional feedstock sources able to be treated by L-Max.

Lepidico shareholders can participate in a renounceable entitlement offer partially underwritten by lead manager CPS Capital Group. The offer will raise up to $4 million.

Lepidico’s managing director Joe Walsh said Lepidico was now fully funded to complete phase one of the L-Max plant feasibility study through to final a investment decision — as well as further advance the company’s resource development and exploration activities.

Shares in Lepidico closed up 25 per cent at 1.5c, capitalising the company at around $32 million.

Galaxy shares were unchanged at $3.14.