Highlights:

• Lithium Australia (ASX:LIT) is divesting its remaining 20% stake in the Greenbushes South Lithium Project.
• The agreement will entitle Lithium Australia to receive a cash payment of AU$2 million and fully paid ordinary shares worth AU$1 million in the capital of Galan.
• The sale is in line with LIT’s continued transition since 2014 from exploration to lithium processing and recycling.

Lithium Australia Limited (ASX:LIT) is committed to advancing its battery recycling division and commercialising lithium ferro phosphate (LFP) cathode powders, as part of its goal to ensure an ethical and sustainable future for the global battery industry.

To further enhance its primary focus, the company has entered into a binding agreement to sell its remaining 20% interest in the Greenbushes South Lithium Project.

Lithium Australia divests stake in Greenbushes South Lithium Project

Lithium Australia has executed the agreement with Galan Lithium Ltd (ASX:GLN), which already owns 80% interest in the project.  

Under the terms of the agreement, Lithium Australia is entitled to receive a cash payment in the amount of AU$2 million and fully paid ordinary shares in the capital of Galan to the value of AU$1 million.

As part of the agreement, LIT has also gained the first right of refusal for offtake of a maximum of 20% of Galan’s share of lithium produced to the company for LFP production for commercialisation purpose in the future. However, the rights will only be entitled if Lithium Australia makes a financial investment decision announcement before 31 December 2029 for a lithium metal phosphate cathode powder commercial facility.

© 2022 Kalkine Media®, Data source: Company update, 13 December 2022

The agreement also highlights that the joint venture partnership between the companies will terminate on the completion of the sale.

Prior to this agreement, on 13 January 2021, Lithium Australia and Galan entered into the Letter Agreement – Acquisition and Joint Venture. As per the agreement, Galan acquired an 80% interest in certain tenements comprising the Greenbushes South Lithium Project.

Additionally, the agreement also gave Galan an 80% interest in LIT’s contractual rights to lithium in certain tenements comprising part of the Greenbushes South Lithium Project.

Lithium Australia’s primary focus on lithium processing and recycling

The development is in line with the company’s continued transition since 2014 from exploration to lithium processing and recycling.

Lithium Australia is focused on achieving its goal through its wholly owned business divisions, Envirostream and VSPC.

Data source: LIT update

Share price: LIT shares were trading at AU$0.046 during the morning session on 13 December 2022, up over 1% from the last close.