Lithium prices are tumbling in the international market over the lithium glut, which is dragging the ASX-listed lithium players down; however, from industry experts to investors, all are betting high on lithium stocks over the anticipated rush in the white gold demand amid EV trends and boom in the energy storage sector.
The estimation of higher exports could further boost the supply chain, and over this reason, the lithium players are losing charm; however, the lithium industry players are still optimistic over the anticipated growth story.
The recent stance of the global economies to curb the environmental pollution in accordance with the Euro-6 emission standards is favouring the EV projections.
The Electric Vehicles are penetrating the market at a rapid pace and underpinned exponential growth in 2018. The total sales of electric vehicles across the globe exceeded 2 million in 2018; while China alone reported the sales of new electric vehicles of 1.26 million, which in turn, witnessed a yearly growth of 61.5 per cent.
Apart from China, the global economies demonstrated promising signs of EV penetration in the Automobile industry, and expect China, the sales of EV across rest of the world in 2018 stood at 763k, up by 69.6 per cent as compared to the previous year.
The Electric vehicles are penetrating both China and the United States automobile market, and the industry experts forecast around 3.8 - 4.5 million EVs to be on the road by 2020. Norway which boasts of being the world leader in EV market share, with 46% of all cars sold in the country is electric.
The development and increased penetration of electric vehicles are also pulling the demand for lithium-based batteries, and with every new EV entering the market, the growth for lithium-ion batteries are also growing in terms of higher volumes.
As time is passing by more and more counties are joining the roof of carbon resilient economies, which over the long-run could provide a potential benefit to the carbon-free EV industry and in a cascade, could further provide a long-term growth impetus to the lithium prices and players.
ASX-Listed Lithium Players:
Galaxy Resources Limited (ASX: GXY)
GXY, the ASX-listed lithium explorer and downstream chemical processor presented its quarterly activity report for the period ended June 2019 on 16th July 2019.
The Mount Cattlin prospect of the company surpassed the production guidance of 45,000-50,000 dry metric tonnes, and the production from the prospect stood at 56,460 dry metric tonnes with a grade of 6.0 per cent lithium oxide. The per-unit cost of output stood at US$337 per dry metric tonnes on Free-on-Board basis, which in turn, placed the Mt Cattlin prospect among the lowest cost lithium concentrate operations in the world.
GXY shipped a total of 29,439 dry metric tonnes of lithium concentrate during the June 2019 quarter, and the company is targeting a shipping volume of 60,000-70,000 for Q3 2019.
The cost of per-unit dry metric tonne of lithium concentrate marked a decline of over 25.50 per cent during the June 2019 quarter against the March 2019 quarter.
The overall production and operations of the company during the June 2019 quarter are as:
Source: Company’s Report
Development During the Quarter:
GXY completed the pilot plant earthworks at its Sal de Vida prospect and planned the pond liners installation for the third quarter of the year 2019. The alternative processing technologies preliminary testing at the Sal de Vida prospect underpinned superior lithium extraction results.
The Phase 2 test work on the upstream operations reached near completion at the James Bay prospect during the June 2019 quarter, which in turn, validated the process design criteria of the concentrator.
The June 2019 quarter also witnessed the addition of three senior officials in the Argentinian management.
GXY exploration activities identified an outcropping pegmatite 2.5km north of the Mount Cattlin prospect, and the company now intends to drill test the identified pegmatite in Q3 2019.
The overall mining volumes and ore grades further inched up in the June 2019 quarter against the March 2019 quarter, which also witnessed a volume and grade growth.
Source: Company’s Report
Jadar Lithium Limited (ASX: JDR)
JDR, an Australia-based mineral explorer, presented the update on detailed sampling; acquisition and interpretation of regional gravity and magnetic survey data on the Vranje-South Project.
JDR completed the latest fieldwork over the Siberian Vranje-South prospect to determine the geometry of the sedimentary basin along with the sedimentary sequences. The field mapping, along with the detailed sampling program, attempted to locate the outcropping fine pelitic strata, which are known to be favourable hosts for Lithium and Boron mineralisation.
Post collecting 28 rock samples, JDR dispatched them for geochemical analyses and received the results, which in turn, underpinned elevated lithium and boron values of up to 180 parts per million and 430 parts per million (ppm) respectively.
Gravity Survey Outcomes:
JDR, which acquired the gravity survey data from Vecom GEO doo- a local contactor, combined the data with the surface sampling data to identify the drilling targets.
As per the company, the Vranje basin hosts an elongated north-south trend, which is parallel to the regional tectonic Paleozoic extensional structure.
Regional Magnetic Survey Outcomes:
JDR acquired the ground magnetic survey to better define the presence of blind Calc- Alkaline volcanic formations at the prospect, that might be related to a spring emanation. The regional magnetic data further shows a magnetic anomaly of possible volcanic sources of boron and lithium.
Lepidico Limited (AXS: LPD)
LPD, the producers of lithium chemicals through proprietary technology, announced on 16th July 2019, that the company commenced 4,700-metre diamond drilling at its Karibib Lithium Project in Namibia.
The company plans to complete the drilling program during September 2019 quarter, which would further allow a mineral resource upgrade during the December 2019 quarter. The drilling program, which would cost the company about A$1 million, intends to upgrade the current mineral resource of the prospect into Measured and Indicated category under the JORC 2012 Code.
The drilling work at the prospect would include infill and extensional drilling of 2,650m with 50m x 25m spacing at the Rubicon deposit, and an infill and extensional drilling of 2,050m with 25m x 25m spacing at the Helikon 1 deposit.
LPD currently developed a sampling program of surface stockpiles to gain a better understanding of grade and tonnage at the Rubicon and Helikon deposits.
The mineral profile of the deposits at the prospect is as:
Mineral Profile within ML204 tenement (Source: Company’s Report)
The lithium-based project of the company contains four granted tenements, which includes one mining lease (ML204) and three exploration permit licences (EPL5439, EPL555 and EPL5718), and all the tenements at the prospect cover 1,054km2 of the Karibib Pegmatite Belt, which is a significant belt of LCT-Type pegmatites.
The JORC 2012 Code complied Mineral Resource estimate for the prospect is at 8.8 million tonnes with an average grade of 0.56 per cent lithium oxide, which the company intends to convert into Measured and Indicated category through extensive drilling.
PepinNini Lithium Limited (ASX: PNN)
PNN, an ASX-listed lithium brine explorer and project developer, reported on 16th July 2019, the results of a study for the brine in Rincon, Pular and Incahuasi projects.
The outcome of the brine study confirmed the highest calcium concentration in brine from the Incahuasi project and highest sulphate concentration in brine from Rincon project. PNN mixed the brines from both the prospect and stimulated it, which in turn, resulted in the precipitation of calcium sulphate (gypsum).
The simulation by the company further indicated that the contaminates reduced from mixing the sulphate and calcium brine would result in enriched brine of 2.24 per cent lithium or 22,400 parts per million lithium with a low Magnesium: Lithium Ratio of 1.02:1.
The final brine composition of Rincon Incahuasi blend is as:
Source: Company’s Report
PNN further combined the brines from both the projects in different projections and produced three different brine mixes, under which the Case 1 blend resulted in the dramatic increase in the lithium recovery amid respective brine chemistry.
The individual composition of the projects and the blend composition are as:
Source: Company’s Report
While the peer groups are engaged in exploration and development, Altura Mining Limited (ASX: AJM) is securing offtakes for its flagship Pilgangoora prospects with Chinese counterparts. China is currently ensuring exposure to the lithium market, and the country is strategically investing in lithium projects to take advantage of the current market conditions.
As on current standing, the lithium prices are relatively down, and Chinese private and public sectors are eyeing on the lithium resources over the long-run by either directly investing in Australia-based lithium projects or securing supplies from Australian miners.
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