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Lithium Australia seals top ASX spot with MinRes deal

Updated: May 27


Lithium Australia doubled its share price on the back of a deal with Mineral Resources. Credit: File

There can be no greater showcasing of lithium’s rise to super-prominence than having the silvery-white metal take centre stage during the biggest annual week in Western Australia’s traditional gold mining heartland.


To be fair, the precious yellow metal was still far from just an onlooker at Kalgoorlie’s renowned Diggers and Dealers Mining Forum last week, with pivotal moments including Auric Mining’s reveal that it had delivered all of the gold from the first 36,000-tonne parcel of ore from its Jeffreys Find project near Norseman to the Perth Mint for its final refining process.


Westgold Resources also added a nostalgic edge to the event when it announced plans to breathe new life into its historic Great Fingall mine in WA’s Mid West region.


But it was lithium – which has recently earnt the tag of “white oil” – that hogged the bulk of the headlines and again created serious share price waves on the ASX.


While Pilbara Minerals was given the top gong as Digger of the Year after dethroning the mighty Greenbushes operation to become the biggest hard-rock lithium mine in the world, Lithium Australia took the tag as the week’s top ASX runner.


News that the company had secured a deal with mining heavyweight Mineral Resources last Monday prompted an intraday share price hike of more than 60 per cent. Its stock doubled during the week to touch 6.6 cents after closing the previous week at 3.3c and its Monday trading volumes were some 20 times more than any other day this year.


Several other lithium explorers also attracted the attention of ASX punters last week, but more on that later.


Lithium Australia believes its “LieNA” technology that was at the centre of its deal with MinRes, has the potential to recover lithium from fine and low-grade spodumene usually dumped as waste. It says the process can enhance lithium extraction yields by up to 50 per cent more than current market performance.


The Perth-based company’s LieNA spodumene conversion and lithium recovery process directly digests fine and/or low-grade spodumene ore in a caustic solution at an elevated temperature and pressure to produce lithium sodalite, a solid aluminosilicate mineral. Lithium is then readily leached out with acid.


According to the management, LieNA does not require energy-intensive and expensive roasting and its water utilisation is better than that of conventional processes – leading to a significant reduction in operational costs. It says its technology has the potential to make deposits with lower grades far more appealing due to the economic benefits of the recovery method.


Subject to the pilot plant results, MinRes and Lithium Australia will form a 50:50 joint venture (JV) to own and commercialise the LieNA technology through a licensing model. The JV plans to license the technology to third-parties at a target headline gross product royalty rate of 8 per cent.


Management says the royalty model has the potential to capture a fee on all tonnage processed from any mine using the technology.

Lithium Australia’s LieNA technology. Credit: File

Lithium Australia has changed tack 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 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. It 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.


Lithium Australia is working towards building a pilot plant and eventually wants to produce an annual minimum of 10,000 tonnes of LFP powder.


Now, back to the lithium theme that rolled its way through ASX markets last week.


Errawarra Resources jumped 69 per cent to hit 19.5c without even lifting a finger. The price hike appeared to be on the back of revelations from its neighbour Azure Minerals that it had recorded a massive 209m hit at 1.42 per cent lithium oxide at its Andover project in WA’s Pilbara region. Errawarra holds ground right next door at its Andover West operation where it recently conducted a rock-chip sampling program.


Perpetual Resources climbed by 68 per cent after rising from 2.2c up to 3.7c. Interest in the company rose after it secured a binding option agreement to add three more exploration permits covering about 5000 hectares in Brazil’s emerging “Lithum Valley” in the State of Minas Gerais. Management says its new tenements sit on an interpreted extension of a modelled pegmatite corridor that runs from Latin Resources’ Salinas project and through its emerging Colina deposit. The move comes less than a month after Perpetual picked up more than 3600ha south of the latest additions.


Stepping away from lithium, Auris Minerals rounded out last week’s top movers and shakers after it received some solid gold, zinc, manganese and lead hits from air-core (AC) drilling at its operations north of Meekatharra. The company reported a 15m intercept at its Morck Well project going 4.11 grams per tonne gold from just 35m, including a 4m section grading a solid 12.8g/t gold from 38m. The site also produced 74m at 12.9 per cent manganese from 49m at its McLean Well prospect, including 6m at a whopping 24.4 per cent manganese from 66m, while a 35m segment grading 1.05 per cent zinc was also recorded.


It just goes to show that while lithium may be the metal on everybody’s lips at the moment, a solid swag of drill hits will still almost always make the market sit up and pay attention.


Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au

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