Strike Resource’s (ASX:SRK) battery metals spin-off Lithium Energy is poised to list on the ASX after raising $9m through an initial public offering of shares.
Lithium Energy is set to list on the ASX later this month (Proposed ASX code: LEL) and will use the proceeds from the IPO to develop its 90 per cent owned Solaroz lithium brine project in Argentina and secure 100 per cent of the Burke graphite project in Queensland.
Notably, Solaroz is directly adjacent to or principally surrounded by mineral concessions being developed into production by lithium heavyweights Orocobre (ASX:ORE) and Lithium Americas Corporation.
Orocobre has dominated the news recently thanks to its upcoming merger with Galaxy Resources (ASX:GXY) to create the world’s fifth largest lithium chemicals company.
The spin-off allows Strike to focus on its Paulsens East iron ore project in the Pilbara region, which has secured approval from the Western Australian government for the Project Management Plan.
This is especially timely given the robust demand for lithium that has seen spot lithium carbonate prices rise about 90 per cent between December 2020 and March 2021.
Lithium Energy will emerge from the IPO with a market capitalisation of $16m with Strike holding 34.4 million shares, or a 43 per cent shareholding in the company.
Solaroz and Burke projects
The 90 per cent owned Solaroz project covers 12,000 hectares of highly prospective lithium brine mineral concessions within the Salar de Olaroz Basin in South America’s “Lithium Triangle”.
Strike believes that the same aquifer that supplies the lithium-rich brine being extracted by Orocobre extends beneath the Solaroz concessions and previously outlined plans for a six-month program of geophysics and drilling to test the geological model.
The Burke graphite project was identified by previous exploration dating back to the 1970s and has a current resource of 6.3Mt grading 16 per cent total graphitic carbon.
This article was developed in collaboration with Strike Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.