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Askari Metals to hit Namibian lithium targets after raising $2.5m

Drilling at Askari’s Uis lithium project in Namibia. Credit: File

Askari Metals will accelerate lithium exploration at its Uis project in Namibia after meeting the conditions for $2.5 million in strategic equity investment by global battery materials supplier Huayou International Resources.

Huayou will subscribe for 4.5 million fully-paid ordinary shares in Askari at an issue price of 55 cents per share and will receive one free attaching option for every three shares purchased. The options have an exercise price of 25c and an expiry date of October 31 next year.

Askari’s share price hovered at around 40c today, meaning the issue is at a healthy premium.

Zhejiang Huayou Cobalt is the ultimate holding company of Huayou and is a tier-one global lithium battery and cobalt materials supplier. It is listed on the Shanghai Stock Exchange with a bulging market capitalisation of about AU$18 billion.

Funds settlement for the strategic investment in Askari is expected to occur in the next few days. The ordinary shares to be issued to Huayou are subject to a one-year voluntary escrow period. The free attaching options issued to Huayou will be freely tradeable once it lodges a cleansing statement in respect to the strategic investment.

Huayou intends to grow its stake in Askari to 9.9 per cent and will have the option to appoint a member to the company’s board at that point. It will also support Askari through the provision of technical input and guidance for continued exploration, development and mine construction, in addition to downstream lithium processing.

In conjunction with overseeing the Company’s aggressive exploration drilling program in Namibia at the Uis Lithium Project, we have diligently proceeded with the necessary steps to enable completion of the Strategic Investment with Huayou. The name Huayou is synonymous with the cobalt and lithium sector not only in China, but globally, and we look forward to welcoming Huayou to the register. We continue to see tremendous upside in our Uis Lithium Project. Askari Metals executive director Gino D’Anna

Zhejiang Huayou Cobalt has four major business segments, which include the development and refining of nickel, cobalt and lithium battery metals, production of precursors and ternary cathode materials and the recycling of battery materials.

Huayou has rich experience in mine construction and operation, including at two copper and cobalt projects in the Democratic Republic of Congo, with an annual production of 100,000 tonnes cathode copper and 10,000 tonnes cobalt. It has invested in three nickel and cobalt projects in Indonesia with an expected annual production of 225,000 tonnes of nickel and 23,000 tonnes of cobalt by next year.

In April last year, Huayou acquired the Arcadia lithium project in Zimbabwe for US$422 million (AU$630.2 million). The designed annual processing capacity of the project is 4.5 million tons of ore and the first batch of product was successfully produced on March 20 this year.

Askari’s Uis lithium project covers an area of 308 square kilometres in a highly-mineralised, spodumene-rich pegmatite belt with a history of prior production and exploration success. The company says its project holds exceptional potential, as identified by due diligence sample results and a high number of pegmatites exposed at the surface, ranging from a few meters in width to more than 50m wide.

Many of the pegmatites have been mined historically for tin and semi-precious stones and altered spodumene and lepidolite are visible within the workings and in the mined rock around them.

The project sits less than 5km from the township of Uis and less than 2.5km from Andrada’s operating lithium-tin-tantalum mine in west-central Namibia. Andrada’s Uis mine has resources of 81 million tonnes at 0.73 per cent lithium oxide, 0.15 per cent tin and 0.14 per cent rubidium. It gives the mine a total resource metal content of 1.45 million tonnes lithium carbonate equivalent, 120,000 tonnes of tin metal and 109,400 tonnes of rubidium with substantial tantalum.

Andrada believes its mine is world class and will eventually expand resources to around 200 million tonnes.

Askari purchased about a third of its ground last month and during its due diligence work it sampled various pegmatite outcrops. Assays identified high-grade lithium, tin, tantalum and rubidium up to 2.11 per cent lithium oxide, 1.3 per cent tin, 658 parts per million tantalum and 4214ppm rubidium. The work also identified several types of pegmatite, including those hosting lithium-caesium-tantalum and caesium-depleted pegmatites that have more correlation with tin and tantalum.

With a knowledgeable and experienced strategic partner on board, Askari is getting to work. Being adjacent to a monster deposit of lithium-tin-tantalum and rubidium and having high-grade rock-chip samples in its ground, the company must be getting excited about its forthcoming exploration.

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