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Lithium Australia Divest 70% of Lepidolite Hill in Strategy Shift

8 May 2023 14:06
ASX: LIT
Lithium Battery AdobeStock Online

Lithium Australia continues to build its lithium-ion strategy, having entered into an agreement to sell 70 per cent of its Lepidolite Hill Lithium Project to Eastern Resources for $550 thousand dollars.

This sale shares many similarities with the Company’s move to divest its Greenbushes South Lithium Project to Galan Lithium for $1 million in shares and $2 million cash in December of last year, as the Company moves its focus away from exploration and towards its other battery market businesses.

Balancing Books

Payment will be delivered in three tranches, with the first $50,000 deposit being made within 10 business days of execution, the second being $100,000 at completion and the final $400,000 delivered within 10 business days of the licence being transferred to Eastern Resources.

Following the transfer, Eastern Resources also have the opportunity to acquire Lithium Australia’s remaining 30 per cent interest in the Project for $1 million in either cash or shares, up until the point that a definitive feasibility study is completed.

Joining Forces

Completion of the sale will result in the creation of a joint venture between the two companies for the exploration, development and possible extraction of minerals from Lepidolite Hill, with Eastern Resources being the Project’s initial manager.

The two companies will also collaborate on an offtake deal for Lithium Australia to receive up to 30% of the lithium product extracted from the Lepidolite Hill Lithium Project.

Maintaining Focus

The Company said that the divestment of Lepidolite Hill will simplify its operations as it moves to focus on growing a nation-leading recycling and cathode powder platform.

Lithium Australia moved to commercialise its wholly-owned subsidiaries in August last year as both Envirostream and VSPC stand at the forefront of Australia’s emerging lithium-ion industry, with VSPC producing lithium cathode pure enough for applications in the electric vehicle and energy industries.

“Over the past few months, we have defined the commercialisation and growth pathways to deliver customer-focused solutions for the lithium-ion circular battery materials industry that will accelerate global electrification for our solutions pathway,” Chief Executive Simon Linge said.

“We are pleased to partner with Eastern Resources who will advance the Lepidolite Hill Lithium Project, while we focus on our technology platforms of lithium extraction, battery materials and battery recycling.”

LIT’s Australian Stock Exchange-listed share price has risen 7.53 per cent today, currently selling at 3.6c (12:10 pm UTC+ 8 hours).

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