Lithium Australia will fill its coffers to the tune of more than half a million dollars after entering into a binding agreement to sell 70 per cent of its Lepidolite Hill lithium project to Eastern Resources.
The deal will see Lithium Australia collect $550,000 in three tranches, with a $50,000 deposit within 10 business days of the execution of the agreement, $100,000 at the completion of the contract and a further $400,000 within 10 business days of when the tenements have been granted and transferred to Eastern Resources.
Once the arrangement has been completed, the two companies will form a joint venture, with Eastern Resources to be appointed the manager of the project. Lithium Australia will be free-carried until the completion of a definitive feasibility study into the operation.
Eastern Resources also has the option of acquiring the remaining 30 per cent share from Lithium Australia ahead of a completed study by paying $1 million in cash or shares.
This divestment of the majority of the Lepidolite Hill Lithium Project further simplifies the Company. 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 pathways. Lithium Australia chief executive officer Simon Linge
The Lepidolite Hill project is near Coolgardie, about 32km west of the Mt Marion lithium mine and 390km from the Esperance port. The operation consists of three prospecting licences that are also subject to a mining lease application.
Previous RC drilling completed by Lithium Australia in 2019 returned solid shallow results including 5m at 1.91 per cent lithium oxide from 13m and 18m grading 1.45 per cent lithium oxide from only 5m.
The Lepidolite Hill deposit was first discovered in 1944 before Western Mining Corporation explored the site in 1964. The site was trial mined for lepidolite and petalite from 1971 until 1973.
Lithium Australia has pivoted in recent times from its original purpose as a minerals explorer to concentrate on recycling technologies and lithium processing. It made a request to the ASX last November to be reclassified as a materials entity and not an explorer.
The company’s main ambitions now include growing its battery recycling business and commercialising a product to rival conventional lithium-ion batteries with its lithium ferro phosphate (LFP) cathode powders. Lithium Australia says demand for LFP represents more than half the global market for lithium-ion battery materials, claiming it is one of just a few entities outside China with the expertise to manufacture LFP powder of the highest quality.
The company is working towards building an LFP pilot plant and eventually wants to produce an annual minimum of 10,000 tonnes of LFP powder.
The deal with Eastern Resources gives Lithium Australia a significant boost to its bank balance while retaining an interest in future developments at Lepidolite Hill.
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