Weekly Lithium Lowdown with Chris Williams – Week 40, 2023

Delta Lithium upgrades MRE at Mt Ida project:

Delta Lithium announced an updated Mineral Resource estimate for its Mt Ida project near Kalgoorlie, Western Australia this week. The update increases the Mineral Resource at Mt Ida to 14.6 Mt grading 1.2% Li2O, including 7.8 Mt in the inferred and 6.8 Mt in the indicated categories (0.55% Li2O cut-off). Extensional drilling from the ~40,000m drill program uncovered and additional 15% of resources for 1.9Mt. Furthermore, due to the presence of Li-bearing mica minerals (i.e., lepidolite), the company now envisages a saleable mica concentrate (2-3.4% Li2O) product.

Adamas take: The modest resource tonnage upgrade together with the material presence of lepidolite is a knock to the economic viability of the project, given the added cost and complexity to the flowsheet over a limited number of years.

Latin Resources publishes PEA for the Colina project:

Latin Resources announced its PEA results for its Colina project in Minas Gerais, Brazil last week. The company envisages a two-phase 1.5 Mtpa to 3.6 Mtpa DMS plant, producing both a spodumene concentrate 5.5% Li2O product along with a SC 3% Li2O product via a DMS tailings recovery circuit. The initial CAPEX is US$253M with US$55M expansion CAPEX, while the integrated all-in sustaining cost CIF China is estimated at US$536/t SC (both SC5.5 and SC3) or US$599/t SC5.5 equivalent. Using a weighted-average CIF US$1,699/t SC5.5 price the NPV8% comes in at US$2.5Bn post-tax.

Adamas take: The results parallel Sigma Lithium’s globally significant Grota do Cirilo DMS-only operation. By comparison, Colina’s ore characteristics may present additional mining and metallurgical factors which will need to be de-risked in the future studies.

Lithium Americas Corp. completes company split:

Lithium Americas Corp. announced the completion of its reorganization, effectively splitting the company’s assets into North and South American jurisdictions. The North American (NewCo) entity known as Lithium Americas will spearhead the Thacker Pass sedimentary-hosted lithium development project which is currently finalizing debt financing and is in early works construction, with first product expected in 2H 2026. Among other development brine projects, Lithium Americas (Argentina) Corp. has a 44.8% stake in Cauchari-Olaroz which this year shipped its first lithium carbonate product.

Adamas take: It will be interesting to see how the split materializes for LAC/LAAC in time, particularly with respect to valuations of clay vs. brine projects which have very different risk profiles. On the surface, the split appears to be a prudent move given the regional and geological differences of the assets.

Albemarle’s successful takeover of Liontown in question:

Billionaire Gina Rinehart’s Hancock Prospecting has acquired 14.67% of Liontown Resources, which is constructing its Kathleen Valley hard rock lithium project in Western Australia. In early September, Albermarle submitted a best and final non-binding proposal for Liontown and has been in due diligence set to conclude next week. Under Australian law, takeover offers via scheme of arrangement can be potentially blocked with as few 15% of the votes.

Adamas take: Whether Hancock intends to block or to JV with Albemarle, the tussle highlights the growing angst among mining insiders to secure lithium units earlier this decade than downstream participants, which of late have secured supply from earlier stage and often unconventional projects.

Lithium Power confirms in talks with Chilean state-owned Codelco:

Following media speculation, Lithium Power International (LPI) confirmed it is in discussions with Chilean state-owned miner Codelco regarding a potential transaction. LPI’s core asset is the shovel-ready Maricunga brine project, south in the “lithium triangle”. The move comes months after the President Gabriel Boric released Chile’s National Lithium Strategy, envisioning public-private partnerships, lead by Codelco, to unlock its vast lithium reserves. To onlookers, the policy has had unclear implications for existing projects. In its defence, LPI has repeated its legal rights as holders of “old code” exploitation licenses for Stage One of the Maricunga project, keeping the door open to competitive M&A activity.

Adamas take: Although discussions are incomplete, Codelco’s move provides some clarity to observers skeptical of Maricunga’s development prospects and reaffirms the project’s merit.

Galan Lithium publishes DFS for Stage 2 of Hombre Muerto West project:

Galan Lithium announced its DFS results for Stage 2 of the Hombre Muerto West project in Catamarca, Argentina. The study builds from the Stage 1 “pilot plant” currently under construction which will produce 5.4 ktpa lithium carbonate equivalent (LCE) in lithium chloride (LiCl) concentrate (6% Li). The incremental 15.4 ktpa LCE-in-LiCl-concentrate capacity would cost US$278M, while the integrated all-in sustaining cost is estimated at US$3,510/t LCE-in-LiCl-concentrate before battery-grade conversion and including provisions for transport to customers in Argentina. Using a ~78% payability on a long-term price of US$29,000/t LCE the NPV8% comes in at US$2.0Bn post-tax.

Adamas take: The DFS numbers stack up competitively as a 1st quartile producer with low CAPEX intensity. That being said, as Argentina rapidly expands its lithium carbonate output, the marketability of Galan’s “unconventional” lithium chloride concentrate product remains a question.

Chris Williams, Analyst at Adamas Intelligence

Chris is an Analyst at Adamas Intelligence focused on the global lithium industry. He researches and analyzes the lithium value chain to uncover actionable opportunities for clients.

Chris has 11-years experience in mining and oil & gas operations optimization, delivering value from data intensive insight generation. He completed his Bachelor and Masters of Engineering at the University of Queensland, majoring in Mechanical Engineering, and is currently completing a Masters of Business Administration at the University of British Columbia.

EV, Battery and Battery Materials Market Intelligence:

EV Battery Capacity and Battery Metals Tracker

Building on ongoing EV registrations in over 110 countries, our web-based platform helps users track monthly deployment of battery metals and materials, battery capacity, and the ever-evolving competitive landscapes of battery chemistries and cell suppliers.

EV Battery Capacity Monthly

The ‘EV Battery Capacity Monthly’ is a subscription-based report for tracking monthly deployment of passenger EV battery capacity by EV type, region, country, make, model, cell supplier and cell chemistry on an ongoing basis.