Lithium Australia (ASX:LIT) announces it has successfully drawn down an additional $800,000 from the $4.5 million convertible note, issued by Mineral Resources Limited (ASX:MIN), as part of the joint development agreement between the two company’s.
A Second Draw Down
In August last year, Lithium Australia entered into the milestone joint venture with Australian mining giant MinRes, outlining the latter would fund Lithium Australia’s development of a pilot plant, up to $4.5 million, using its patented LieNA® lithium extraction technology.
MinRes was to fund both the development and operation of the plant, in addition to providing all the required materials to support the subsequent lithium extraction, with Lithium Australia contributing its LieNA® technology to enhance lithium extraction yields by up to 50% over current market performance.
Under the Agreement, MinRes will fund the Company on a quarterly basis in advance, adjusted for a reconciliation from the prior quarter.
The $800,000 drawdown, received in January 2024, will cover agreed activities from the 1st January until the end of the third quarter of financial year 2024.
Lithium Australia has outlined the funding will be used to build upon the progress made during the previous quarter, including the assessment of spodumene samples provided by MinRes, preparation of piloting plant equipment and progressing a formal tendering process for the engineering study.
The Company has said it looks forward to continuing its relationship with MinRes and aims to deliver positive results from the piloting activities in 2024.
As Lithium Australia progresses the engineering study, it announces following the tendering process, it has appointed Carnac as the lead engineer.
Carnac is a multi-disciplinary engineering consultancy with expertise in sustainable mining, minerals, and chemical processing.
On successful completion of the pilot plant operations and engineering study, MinRes’ convertible note will convert into equity in a new 50:50 joint venture, which will wholly own the LieNA® technology going forward.
The two parties plan to license the LieNA® technology to third-parties at a target headline gross product royalty rate of 8% .
Lithium Australia’s Managing Director and CEO, Simon Linge, commented on the progession of the partnership.
“We are excited by the progress we have made so far with our partner MinRes,” he said.
“The second drawdown from the convertible note follows from a successful second quarter of financial year 2024 and highlights our aligned ambition to continue developing the LieNA® technology.”
“The appointment of Carnac and delivery of the engineering study will facilitate the development of the demonstration plant following the formation of a JV. We look forward to continuing our partnership and are on track to deliver positive results from the pilot plant during 2024.”
LIT’s Australian Securities Exchange-listed share price is currently trading at $0.031 (9.15am UTC+ 8 hours).