Lithium Australia’s Eventful December 2019 Quarter in Focus

Lithium Australia NL (ASX:LIT), working to ensure ethical, sustainable and efficient supply of energy metals to the battery industry by creating a circular battery economy, has announced its update on business activities undertaken during the Quarter ended 31 December 2019.

Projects/ Alliances

Source: Company’s Website

Division-Wise Activities

BATTERY RECYCLING

• Envirostream Australia Pty Ltd (EVS)

LIT increased its stake in Victoria-based Envirostream Australia Pty Ltd (EVS), to 84% and moving to 90% shortly. EVS operates the only facility where spent batteries are shred in the country, including lithium-ion batteries (LIBs), from which mixed-metal dust (MMD) in produced containing critical battery materials such as cobalt, nickel, lithium and manganese.

Currently, MMD is being exported to South Korea for further refining as per the offtake deal signed with South Korean battery recycler SungEel Hitech Co., Ltd.

During the quarter, EVS relocated its plant from New Gisborne to Campbellfield in Victoria, delivering improved cost efficiencies as the first shipment of MMD was sent.

• VSPC Cathode Powders

LIT's 100%-owned nanotechnology subsidiary VSPC has a pilot plant and advanced R&D laboratory and testing facilities in Brisbane, Queensland. As announced earlier on 3 October 2019, LIT recovered lithium as lithium phosphate (LP) from feed material supplied by EVS using its processing technique. Thereafter, VSPC used that LP as direct feed in cathode powder production of lithium ferro phosphate (LFP) coin-cell batteries, which exceeded in-house test standards upon electrochemical testing by VSPC.

• The Battery Circular Economy

LIT’s production cycle (given below) demonstrates potential for improving efficiency and reducing manufacturing costs in the battery industry. At the same time, LIT aims to improve resource sustainability and reduce the environmental footprint of portable power to enhance global efforts to deal with climate change.

Lithium From Recycled Batteries → LP → LFP Cathode Material → New LIBs

LITHIUM CHEMICALS

• In the December quarter, the International Bureau of the World Intellectual Property Organisation published two Lithium Australia patent applications for the recovery of lithium phosphate from lithium-bearing silicates and solutions.
• The Company is also in discussions with some lithium concentrate producers to commercialise its LieNA® process. Successful commercialisation will improve the utilisation and recovery of existing spodumene processing operations.

BATTERIES

• During the quarter, LIT and leading Chinese battery producer DLG Battery Co. Ltd formalised a JV Agreement for Soluna Australia Pty Ltd to commercialise VSPC cathode powders in China and develop a battery distribution business within Australia.
• The test programme for VSPC’s Gen 4 LFP cathode material commenced in March 2019 and completed in December quarter at DLG’s R&D facility in Shanghai, China. VSPC cathode powder met stringent performance specifications, which were an important precursor to DLG agreeing to purchase them for its batteries.
• Currently, an LFP supply chain is being established by VSPC to various LIB cell makers in China by 2021, including DLG for applications like LIB energy storage cells, big transport vehicles etc.
• A Memorandum of Understanding (MoU) was signed between VSPC and Beijing Saideli Technology Incorporated Company Ltd whereby both parties would collaborate on a staged plan for VSPC to commercialise production of its LFP cathode material.
• During the reporting period, Soluna Australia Pty Ltd appointed its first two employees, Mr Kieron D’Arcy (General Manager) and Ms Raegan Jubb (Sales Manager), both with more than 10 years’ experience in the renewable energy sector. Soluna also took delivery of energy storage products in Australia.
• Certain Japanese battery-cell producers have also given a positive feedback to VSPC after evaluating its LFP materials at laboratory scale wherein the LFP material’s electrochemical performance met their conditions. VSPC is now undertaking further product refinement for a larger scale testing in 2020.

RAW MATERIALS

A review of Lithium Australia’s exploration activities at its different projects is given below-

• Medcalf lithium prospect, Lake Johnston project – Western Australia: LIT plans to commence drilling to test this target and seeking approvals from the appropriate authorities. The Program of Works has been submitted, pending a Targeted Flora Survey and Environmental Exploration Management Plan.
• Dudley project – Kangaroo Island, South Australia: Studies of prospective pegmatites at this project revealed significant potential for high-purity kaolin and halloysite, as well as gem-quality tourmaline. Thus, LIT is seeking expressions of interest in a commercial transaction such as a sale, joint venture, farm-in, sublease or any other that will provide benefit to LIT shareholders.
• Ravensthorpe rehabilitation – Western Australia: A Rehabilitation is ongoing at Ravensthorpe and the Company has reported progress at Deep Purple. Also, LIT has received approval from DMIRS of its updated rehabilitation plan and will commence further rehabilitation work shortly.
• The Company is planning to execute further exploration at Greenbushes project – Western Australia and Bynoe project – Northern Territory; Queensland projects.
• Sadisdorf Lithium Project, Germany- A Pre-feasibility study, including further resource modelling, sampling and SiLeach® processing, is ongoing at this project location to test the viability of cathode material production for LIBs.

Corporate

Lithium Australia secured two separate funding deals during the quarter totalling $ 6.6 million. Also, LIT and VSPC received R&D rebates worth $ 2.2 million while EVS was awarded a Sustainability Victoria grant. Currently, LIT is awaiting the outcome of 3 other grant applications.

Stock Performance: Lithium Australia has a market capitalisation of around $ 33.69 million. On 3 February 2020, the LIT stock closed the day’s trade at $ 0.056 with ~ 2.33 million shares traded. LIT has delivered positive returns of 13.21% in the last six months and 50% in the last three months.

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