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Lithium Australia Finalise Lepidolite Hill 70% Sale

7 June 2023 15:11
ASX: LIT
The Company is now in a joint venture for the Project, with the opportunity to receive up to 30% of the lithium product extracted from the Lepidolite Hill

Lithium Australia continues to advance its lithium-ion battery strategy, having finalised the sale of 70 per cent of the Lepidolite Hill Lithium Project to Eastern Resources for $550 thousand dollars.

Divesting for Growth

Funds for the sale will be delivered in two tranches, with LIT having already received the first tranche of $150 thousand dollars and the remaining $400 thousand dollars expected to be delivered once Eastern Resources have been granted the mining licence for Lepidolite Hill.

With its remaining 30 per cent ownership, Lithium Australia will be forming a joint venture with Eastern Resources for the Project, with the two companies now in advancing discussion towards an offtake agreement, which could see Lithium Australia receive up to 30% of the lithium product extracted from the Lepidolite Hill Lithium Project.

Eastern Resource also has 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.

Shifting Strategy

The sale is just another step in LIT’s strategy to move away from lithium mining and exploration to focus on its downstream Lithium-ion battery production business and grow a nation-leading recycling and cathode powder platform, with the Company making a similar move late last year, divesting Greenbushes South Lithium Project to Galan Lithium for $1 million in shares and $2 million cash.

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, and it’s a move that has seemed to pay off, with these subsidiaries seeing a number of big wins.

In September, LIT’s battery-recycling subsidiary Envirostream secured a massive agreement with South Korean tech giant LG Energy Solutions to process a minimum of 250t of LGES energy storage system lithium-ion batteries in addition to current collection volumes.

This was followed shortly after in December, when Envirostream was highlighted by the WWF-Australia Renewable Superpower Scorecard as making an indelible impact on turning the nation into a renewable export superpower, due to the subsidiary being the first Australian recycling company to safely transport, store and process batteries locally at the end of their life.

The Company’s LFP cathode powder producer VSPC also drew eyes in April, when independent testing by leading battery technology company NOVONIX Battery Technology Solutions showed that VSPC’s LFP cathode is pure enough to support long-lifetime cell designs that are ideal for a range of applications in the electric vehicle and energy industries.

It’s this change in strategy that appears to be resonating with investors as LIT’s Australian Stock Exchange-listed share price has risen 5.71 per cent today, currently selling at 3.7c (2:19 pm UTC+ 8 hours).

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