Lithium Australia (ASX:LIT) has successfully completed the $2 million sale of its remaining 30 percent holding in the Lake Johnston Lithium Project to Charger Metals NL (ASX:CHR). The total consideration package consists of an upfront and nonrefundable $0.15 million exclusivity payment, with the remaining balance of $1.85 million anticipated on completion.
The divestment working to demonstrate Lithium Australia‘s continued focus on its core operations, whilst significantly bolstering its balance sheet.
The biding agreement was first announced in November last year, however, the transaction was subject to a number of conditions, including approval by Charger shareholders, which was satisfied at Charger’s EGM held yesterday.
The terms of the binding agreement outline Lithium Australia will sell its remaining 30 percent interest in the Lake Johnston Lithium Project, located in Yilgarn of Western Australia, and the contractual rights to the lithium in the tenements.
The divestment of the asset reflects the Company’s renewed focus on its core operations of battery recycling, lithium chemicals, and battery materials.
The cash proceeds of the transaction additionally strengthen the Company’s balance sheet, placing it in a strategic position to meet its growth objectives and reflect its ongoing commitment to decarbonise lithium production.
Lithium Australia has also retained a first right of refusal for offtake up to 30% of lithium produced by the Lake Johnston Lithium Project, providing a path to future lithium access to be applied in the commercial production of LFP.
Lithium Australia Partnerships
In August 2023, the Company announced it had entered into a massive joint development agreement with Australian mining giant MinRes (ASX: MIN), to develop a $4.5 million pilot plant using Lithium Australia’s patented LieNA® lithium extraction technology.
Figure 1: Lithium Australia’s patented extraction technology offers competitive advantage for miners. Graphic: Lithium Australia’s Investor Presentation.
The patented technology allows for the recovery of lithium from fine and low-grade spodumene, typically disposed of as waste streams, allowing for improved mining efficiency, sustainability and potential profitability.
This milestone agreement earmarked Lithium Australia’s transition away from lithium exploration and toward lithium-ion battery development, with the Company moving to divest a number of its exploration projects like Lepidolite Hill and GreenBushes, whilst commercialising its Envirostream and VSPC subsidiaries.
LIT’s Australian Securities Exchange-listed share price has risen 3.23% and is currently trading at $0.032 (7.55am UTC+ 8 hours).