Novo rejigs European lithium plan over legal battle, shares slide 10pc
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Lithium minnow Novo Litio has placed its Sepeda project on the backburner amid a legal brouhaha, a move that has investors less than excited.
Novo (ASX:NLI) shares were down more than 10 per cent at 5.3c by midday. Since the start of December their shares have slumped 46.4 per cent to a one-month low of 5.2c.
To avoid further delay and disruption to its “European lithium strategy”, the company plans to place more focus on developing its other projects, Novo told investors this morning.
But Novo has vowed to still continue its legal fight against privately-owned Portuguese exploration junior Lusorecursos to protect its interests in the Sepeda project.
The dispute began back in June last year when Novo, then Dakota Minerals, inked a binding deal with Lusorecursos to acquire a tenement package over the three most prospective areas for spodumene and petalite-hosted lithium in Portugal.
Novo had been trying to get its hands on a mining licence application for the project before the current exploration licence expired on December 7, but Lusorecursos has been making it difficult for Novo to replace the existing exploration licence with a mining licence.
Another factor in the company’s decision to focus on its other projects is the outcome of a scoping study completed earlier this year that indicated Sepeda would need a larger resource to justify the construction of a battery-grade lithium carbonate plant in Portugal.
Novo is now working on pinpointing new lithium targets on its landholding in the northern Portugal lithium belt.
The company expects to be granted several other licence areas that are currently under application in the near future.
Desktop studies have already been completed on the applications and field crews are ready to start work once the tenements are granted.
In Sweden, drilling permits for the Spodumenberget lithium project were granted last week and Novo plans to begin drilling in the first quarter of 2018.
The company is also looking at other potential acquisitions in Europe as part of its strategy.
Novo has been contacted for comment.