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#TM1 Technology Minerals – Britishvolt gets £100m boost to build UK’s first large-scale ‘gigafactory’

The deal to build an electric car battery plant near Blyth will bring up to 3,000 jobs to the area by 2028

A rendering of a Britishvolt plant set to be built near Blyth, Northumberland.
A rendering of the electric car battery Britishvolt plant set to be built near Blyth, Northumberland. Photograph: Britishvolt

The government’s Automotive Transformation Fund will invest alongside asset management company Abrdn and its majority-owned property investment arm, Tritax, to fund a sale and leaseback deal for the huge building that will house the electric car battery factory, near Blyth in Northumberland.

Peter Rolton, Britishvolt’s executive chairman, said: “The UK automotive industry needs a local source of batteries. Chinese or other Asian imports are not going to be an option. There will be very, very significant shortfalls of batteries. We are absolutely vital to maintain the UK industry and support those jobs.”

An artist impression of the Britishvolt factory in Northumberland.
An artist impression of the Britishvolt factory, the first full scale UK battery gigaplant. Photograph: Britishvolt/PA

Britishvolt is one of two major UK battery manufacturing projects that has secured funding, alongside an expansion of an existing plant at Sunderland owned by China’s Envision that supplies to Nissan.

The company is hoping to build the plant rapidly with the aim of supplying a large part of the UK car industry’s needs as it transitions from internal combustion engines to electric cars that produce zero exhaust emissions. It is in talks with several potential clients, and sportscar maker Lotus has signed a memorandum of understanding, Bloomberg reported on Thursday.

A new electric vehicle charging station in Slough.
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The plant will employ about 3,000 workers when it is at full capacity in around 2028. The first batteries are scheduled to start production in 2024 to take advantage of rising demand ahead of the UK’s 2030 ban on new cars without a battery.

The government and Britishvolt declined to detail the size of the government investment, citing commercial confidentiality. However, a source with knowledge of the negotiations said it was worth about £100m.

The government-funded Advanced Propulsion Centre calculates that the UK will need to produce batteries with a capacity of 90 gigawatt hours (GWh) a year if it is to retain a car industry of a similar size. Current UK production capacity is less than 2GWh, but Britishvolt hopes to produce 30GWh.

Local authorities in the West Midlands and Somerset are trying to attract investors to two more potential battery manufacturing sites. The West Midlands site at Coventry airport last week gained pre-emptive planning permission.

Rolton said: “The company was still working on the timing of a planned stock market listing which will raise the money to build the production line. The full project is expected to cost £3.8bn, but the government backing has already helped in conversations with potential investors.”

 

Britishvolt has previously won backing from Glencore, the FTSE 100 miner, and preparatory construction work at the 93-hectare site has begun.

Securing investment in UK-based battery manufacturing has been an important goal for the government. The prime minister, Boris Johnson, has on several occasions referred to his hopes for the project as part of his plans to “level up” parts of the country that have missed out on investment in recent decades.

The plant will be based in the constituency of Wansbeck, narrowly retained by Labour in the 2019 general election. It is next door to Blyth Valley, a seat formerly part of Labour’s “red wall”, which voted in a Conservative MP for the first time in that election.

Johnson said the plan “is a strong testament to the skilled workers of the north-east and the UK’s place at the helm of the global green industrial revolution”. He added that the factory will “boost the production of electric vehicles in the UK”.

Rolton said Britishvolt had taken part in a jobs fair in the area which prompted “queues round the block”, while some parents even took children out of school to attend. “That’s what it means for the area,” he said.

Read this on The Guardian

#KDNC Cadence Minerals – Cadence Minerals’ lithium asset upgrade after Cinovec’s ‘outstanding results’

Cadence Minerals have enjoyed a dramatic improvement in the quality of their lithium investments after ‘outstanding’ results from the Cinovec mine in the Czech Republic.

The Cinovec mine is operated by European Metal Holdings which has a 49% in the mine. Cadence Minerals holds 8.7% of the equity in European Metal Holdings.

In an announcement made this week, the Cinovec asset received significant upgrades to the resources that included revisions higher to the annual output and the impact of higher lithium prices.

The most recent feasibility study found it is possible to amend the mining process to incorporate the use of paste backfill which will be instrumental in increasing the mines output by 16%.

As a consequence, the Cinovec mine’s expected output has been increased from 25,267 tpa to 29,386 tpa.

The combination of rising lithium prices and the increased production means the projects NPV8 (post tax) increases from $1.108B to $1.938B. This is based on lithium prices of $17,000 which is significantly below the current market price.

“An increased mine life and a resource upgrade that takes the NPV8 from USD1.1bn to USD1.94bn adds substantial value to Cinovec’s already exceptional potential as a future battery grade lithium supply hub for Europe and the rest of the world,” said Cadence CEO Kiran Morzaria.

“Cadence are pleased to remain shareholders and supporters of EMH, and we look forward to further developments.”

The news has seen European Metal Holdings share soar this week to trade at 81p.

Cadence Minerals owns approximately 8.7% of European Metal Holdings following a placing conducted by European Metal Holdings to raise A$14.4 million.

Cadence Minerals stake is worth circa £12.4m with European Metal Holdings shares trading at 81p.

To put this in to context, Cadence Minerals entire market cap is £41m so the market is effectively currently attributing a value of just £28.5m to the rest of Cadence’s assets.

Cadence Minerals Portfolio

Although the latest developments at Cinovec adds tremendous value to a publicly-traded holding of Cadence’s portfolio, their flagship project is the Amapa Iron Ore project which has targets to produce $725 million iron ore per annum.

Cadence Minerals has additional exposure to lithium at the Sonora mine operated by Bacanora Minerals, as well as interest in Northern and Western Australia.

Cadence also has a 30% interest in the Yangibana Rare Earths project operated by Hastings Technology Metal in Western Australia.

 

Read the article on UK Investor Magazine

#BRES Blencowe Resources – Appointment of Battery Limits

Blencowe Resources Plc (” Blencowe” or the “Company”) (LSE: BRES) is pleased to announce the appointment of highly regarded Australian Engineering firm Battery Limits to assist the Company in the completion of the Orom-Cross Graphite Project Pre-Feasibility Study.

Highlights

· Battery Limits is a highly experienced graphite project development engineering firm.

· Battery Limits has completed Feasibility Studies for several tier one graphite projects internationally.

· Extensive graphite project experience in East Africa.

Battery Limits is one of the most experienced graphite project development engineers internationally, with extensive experience in East African graphite projects. Battery Limits has been selected to assist the Company on the basis of this relevant project experience which includes:

· Armadale Capital – Lindau Mahenge Tanzania Graphite feasibility study

· MRC – Munglinup Graphite Australia DFS

· International Graphite – downstream processing DFS

· Graphex Chilalo Graphite – PFS update, PFS and scoping studies and DFS metallurgy and process engineering

· Volt Resources – Bunyu Graphite Tanzania FS, PFS, scoping studies

· Armadale Capital – Lindau Mahenge Tanzania Graphite scoping study

· BlackEarth Minerals – Maniry Graphite Madagascar scoping study

· Black Rock Mining – Mahenge Graphite Tanzania PFS

· Magnis Resources – Nachu Graphite Tanzania PFS

· Triton Mineral – Ancuabe Graphite Mozambique scoping study  

 

Blencowe considers this previous project experience, and in particular the East African graphite knowledge, highly beneficial to Battery Limits assisting in the development of Orom-Cross project.

Battery Limits will lead the Pre-Feasibility Study and will ultimately sign off on the Study, thus providing key credibility to all parties concerned. Study aspects of process engineering and process plant design, capital and operating cost estimates, management of ongoing metallurgical testwork, infrastructure and project implementation will all be undertaken by Battery Limits.

Specialised sub-consultants in Uganda and South Africa will be assisting with tailings storage design, geotechnical and hydrological studies under supervision of Battery Limits.

Executive Chairman Cameron Pearce commented:

“We are both pleased and privileged to have a technical partner with the capabilities and experience of Battery Limits helping us to deliver the PFS, due for completion around mid-2022.  Our Orom-Cross graphite project continues to move towards first production in the medium term and their involvement will help provide a stronger operational and commercial model.”

 

 

For further information please contact:

 

 Blencowe Resources Plc

Sam Quinn

www.blencoweresourcesplc.com

Tel: +44 (0)1624 681 250

info@blencoweresourcesplc.com

Investor Relations

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

First Equity Limited

Jason Robertson

Tel: +44(0)20 7330 1833

jasonrobertson@firstequitylimited.com

Does EV and battery tech really sound the death knell for Oil and Gas?

Future of Oil and Gas

In an era of rising demand and hype for electric vehicles (EV) and battery technology, commodities and ETFs linked to oil and gas have managed to hold their prices. EV stocks like Tesla and Nio have increased by 71% and 100% respectively in the past year. The price of WTI Crude Oil has also increased by 76%, while prices of micro-cap oil stocks like #ECHO Echo Energy and #MSMN Mosman Oil and Gas have increased by 58% and 13% respectively.

This clearly signifies that even after the rise in demand of EVs, commodities like oil and gas are here to stay in the short and long term.

Consumers are under the impression that they could be in an oil-free world by 2030 and most consumers perceive batteries and electricity as the primary source of energy. However, this is highly unlikely and nothing but a series of myths planted in our brains due to effective marketing.

The International Energy Agency (IEA) that analyses trends in energy industry, released its annual World Energy Outlook in November 2019. It looks at potential energy demand and supply under different scenarios to explore different possible futures. The IEA scenario stated a global increase in energy demand by 24% by 2040 of which, oil and natural gas will supply 64% of the world’s energy needs. In accordance with the Paris Climate Agreement, if based on the Sustainable Development Scenario, the oil and natural gas will still supply 47% of the world’s energy by 2040.

More than 15% of oil demand goes into non-combusted use including petrochemicals which is expected to grow to 20% by 2040. Even if the demand for gasoline and other fuels may hypothetically be on the decline, the petrochemical sector, in contrast, still has room to grow. Some major companies have even pledged some $100bn into the petrochemical industry over the next decade.

Developing countries like India have one of the most aggressive renewable power capacity roll-out programmes worldwide. However, its access to affordable fossil fuels remains a priority for its government because its needs for cheap oil, gas and coal continue to rise to meet energy demand that is forecast to more than double by 2040. India’s petroleum minister Dharmendra Pradhan believes the world’s third-largest oil consumer could be the “golden goose” for crude suppliers as it buys more than 80% of its oil needs from foreign crude purchases.

The graph below demonstrates that the forecasted oil demand for 2040 is higher than present day with non-combusted being the driver to increase the demand. While in the primary energy consumption chart, oil is forecasted to maintain its consumption as a primary source by 2040. Whereas the primary consumption of gas is forecasted to rise.

 

(Financial Review, 2020)

 

Texas Oil Wells

In 2018, companies in the Permian Basin – “an ancient, oil-rich seabed that spans West Texas and South Eastern New Mexico — were producing twice as much oil as they had four years earlier” whilst forecasters expected the production to double again by 2023.

The International Energy Agency (IEA) had also predicted that American oil mostly from the Permian will account for 80% of growth in global supply over the next seven years.

Some small companies already had presence in the Permian Basin before these predictions and report in 2018. In 2017, Mosman Oil & Gas (MSMN) acquired several oil and gas leases comprising the Welch Permian Basin Project for a consideration of $310,000. Although the Welch project contributed to a gross profit of $167,000 in the year ended 30 June 2020, recently Mosman sold this Welch Project for $420,000 receiving a premium of 40% from the sale of the project alone.

Mosman is steadily growing its working interests across a number of projects in Texas, including Stanley, Falcon-1, Winters and Galaxie. These have produced a gross profit of over $500,000 in the 2020 year. Stanley also has a 100% success rate with oil production from four wells drilled to date.

Texas wells are providing high returns to oil companies, and with a growing number of projects and acreage, Mosman is well placed for future growth.

South Argentina Oil Wells

Many companies own wells in Argentina and Latin America as it is considered a region rich in resources with 4% of natural gas reserves and 20% of world oil reserves. They are also often undergoing positive development in macro conditions. A strong demand outlook for energy consumption and economic growth coupled with underdeveloped – but lower cost – onshore plays, makes Latin America a favourable region for companies like Echo Energy (ECHO) to deploy its expertise in support of an exploration-led growth strategy.

For the financial year ended 31 December 2020, Santa Cruz Sur at the south-eastern tip of Argentina helped Echo Energy to increase its revenue fourfold to US $11.1mn. This was also due to Echo securing new gas sales contracts at premium rates to the prevailing spot markets in early Q1 2021.

The increase in revenue drove an significant increase in the Echo Energy (ECHO) stock price by 51% from 55p to 83p between December 2020 and January 2021.

Major and Small Suppliers of Oil and Gas

The difference between the barrels of oil supplied can be huge when major suppliers are compared to the small suppliers. But all that glitters is not gold. High supply and production would require a higher demand to be profitable, if the demand of oil stagnates in the future it will affect the major suppliers before the small suppliers.

The big 10 companies accounted for 28% of global oil production in 2020 as shown below.

When this is compared to small oil producers like Echo Energy and Mosman Oil and Gas,  Echo Energy produced a cumulative of 94,000 barrels of oil in Santa Cruz Sur in South Argentina. While Mosman Oil and Gas produced a gross of 90,000 barrels of oil in the year ended June 2020. Based on available data, the production of Echo and Mosman combined is 0.2% of the global oil demand.

This is effective during times of recession or when the global demand is low as during unprecedented times a major oil supplier to generate profits and work at full capacity would need to sell between 5-12% of oil demand while small suppliers of oil would need to fulfil a negligible percentage of global demand of oil to turn profitable. This is due to high storing and inventory costs for major oil suppliers as well as higher fixed costs due to bigger operations.

Conclusion

Therefore, even though the oil demand is perceived to be lower in the future due to alternative resources, the demand doesn’t seem to be in decline due to oil having uses other than fuel and gas for cars and transportation like non-combusted petrochemicals. Even if the demand for oil is on the decline it would not affect small oil suppliers; as working at full capacity they fulfil just a small percentage of global oil demand and still manage to make hefty profits.

These among many, are the reasons keeping the oil prices buoyant and in the mix, not only for the present day but also for the future.

#BRES Blencowe Resources Plc – Update on Orom-Cross Graphite Project

Blencowe is pleased to deliver an update to the market in regards to work streams progressing on the Company’s flagship Orom-Cross graphite project in Uganda.

Highlights

  • Phase Two drilling program was completed in early August; all samples have been prepped and are in transit to laboratories in Australia for assaying.
  • Blencowe continues to target a revised, upgraded JORC Standard Resource statement in Q4 2021.
  • Preliminary Economic Assessment (“PEA”) for the initial proposed mining operation at Orom-Cross is considerably advanced and should be completed before 30 September 2021 with public release shortly thereafter.
  • Forthcoming PEA to be first full commercial model for entire project and will indicate how valuable the Orom-Cross project is on a global scale.

The Orom-Cross project is now developing into an outstanding graphite project based on the recent project milestones achieved and other factors including:

  • Significant size and scale of the overall deposit will allow substantial future uplifts to production levels to meet anticipated surges in graphite demand;
  • Highest quality 97-98% concentrate verified by leading independent metallurgical test expert, SGS Lakefield in Canada;
  • Low risk location to develop a long-term mining operation, with stable Government in Uganda supportive of the mining industry;
  • Strong community support;
  • Advanced project, with 21-year Mining License already awarded; and
  • Opportunity to develop Orom-Cross into a battery metals market that is forecast to grow considerably over next decade, as lithium-ion batteries become highly sought after to power exponential growth in electric vehicles (EVs). Graphite is a key component of the lithium-ion battery.

Cameron Pearce, Executive Chairman commented:

“The Company has made considerable progress over the past sixteen months since Orom-Cross was acquired and is now about to deliver a first economic model to share with the market. 

We are confident that the PEA will underline the value that has been built to date and outline further upside that Orom-Cross can become a globally significant graphite project due to its scale and mineralogy.

The PEA will also begin the process of allowing investors to assess the project in the context of it’s global peer group and provide a robust framework for us to progress strategic discussions already initiated with a range of parties such as potential offtake agreements and strategic partnerships.  We also look forward to delivering our revised JORC Resource Statement in the fourth quarter of this year.

Following delivery of the PEA we will then seek to progress to a pre-feasibility study (“PFS”) to ensure that we further de-risk the investment decision as we drive towards first production.”

Background to PEA

The completion of the PEA by the end of month comes as a result of a range of key achievements Blencowe has delivered on to date, both in terms of timing and budget, and most specifically the initial JORC Standard Resource statement, the second drilling campaign to further delineate a greater part of these resources to a lower risk category (Indicated and Measured status) and the exceptional metallurgical test results announced in the middle of the year.

The PEA has been built up internally by Blencowe’s management team who have significant experience in this regard, with a stated purpose to be accurate but conservative. However all key numbers within the PEA have been generated via the involvement of third party technical experts to ensure credibility and integrity.

The next step beyond PEA will be for the PFS to commence, which will ultimately be signed off by a third party technical firm.  As part of the PFS Blencowe will be opening dialogue with potential offtake partners on quantity, quality and pricing of end products as available for sale.

 

For further information please contact:

  Blencowe Resources Plc

Sam Quinn

www.blencoweresourcesplc.com

Tel: +44 (0)1624 681 250

info@blencoweresourcesplc.com

 

Investor Relations

Sasha Sethi

Tel: +44 (0) 7891 677 441

sasha@flowcomms.com

 

Brandon Hill Capital Limited

Jonathan Evans

Tel: +44 (0)20 3463 5000

jonathan.evans@brandonhillcapital.com

 

First Equity Limited

Jason Robertson

Tel: +44(0)20 7330 1833

jasonrobertson@firstequitylimited.com

 

 

Twitter https://twitter.com/BlencoweRes

LinkedIn https://www.linkedin.com/company/72382491/admin/

 

Background

Orom-Cross is a potential world class graphite project both by size and end-product quality, with a high component of more valuable larger flakes within the deposit. A 21-year Mining Licence for the project was issued by the Ugandan Government in 2019 following extensive historical work on the deposit and Blencowe is moving into the studies phase shortly as it drives towards first production.

Orom-Cross presents as a large, shallow open-pitable deposit, with a maiden JORC Indicated & Inferred Mineral Resource deposit of 16.3Mt @ 6.0% Total Graphite Content. Development of the resource is expected to benefit from a low strip ratio and free dig operations, thereby ensuring lower operating and capital costs.

There are now more electric vehicle charging points than petrol stations in UK

The latest figures have revealed there are 9,300 EV charging stations in the UK compared to 8,400 fuel stations

Volkswagen plans 22 million electric vehicles in ten years

  • Almost 70 new electric models by 2028 – instead of the 50 previously planned
  • Comprehensive decarbonization program for the Volkswagen Group signed off
  • Volkswagen Group targeting fully CO2-neutral balance by 2050
  • Diess: “Volkswagen will change radically. We are taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection.”

The Volkswagen Group is forging ahead with the fundamental change of system in individual mobility and systematically aligning with electric drives. The Group is planning to launch almost 70 new electric models in the next ten years – instead of the 50 previously planned. As a result, the projected number of vehicles to be built on the Group’s electric platforms in the next decade will increase from 15 million to 22 million. Expanding e-mobility is an important building block on the road to a CO2-neutral balance. Volkswagen has signed off a comprehensive decarbonization program aimed at achieving a fully CO2-neutral balance in all areas from fleet to production to administration by 2050. Volkswagen is thus fully committed to the Paris climate targets.

Dr. Herbert Diess, CEO of Volkswagen AG, said: “Volkswagen is taking on responsibility with regard to the key trends of the future – particularly in connection with climate protection. The targets of the Paris Agreement are our yardstick. We will be systematically aligning production and other stages in the value chain to CO2 neutrality in the coming years. That is how we will be making our contribution towards limiting global warming. Volkswagen is seeking to provide individual mobility for millions of people for years to come – individual mobility that is safer, cleaner and fully connected. In order to shoulder the investments needed for the electric offensive we must make further improvements in efficiency and performance in all areas.”

The Volkswagen Group has set milestones in all areas to be achieved in the coming years on the road to complete decarbonization by 2050. The measures follow three principles: first, effective and sustainable CO2 reduction. Second, switch to renewable energy sources for power supply. Third, compensate for remaining emissions that cannot be avoided. In order to improve the CO2 balance of vehicles throughout their lifecycle, for example, Volkswagen has already made a start on the supply chain. A detailed roadmap is currently being drawn up. There is particularly significant potential as regards steel and aluminum supplies.

The 2025 target is to reduce the CO2 footprint of the vehicle fleet by 30 percent across the lifecycle compared to 2015. Volkswagen is therefore electrifying the vehicle portfolio, with investment in this area alone amounting to more than €30 billion by 2023. The share of electric vehicles in the Group fleet is to rise to at least 40 percent by 2030. The first of the new-generation electric vehicles go into production this year: the AUDI e-tron will be followed by the Porsche Taycan. Reservations for each of these models already total 20,000 units. And electric vehicles will be brought into the mainstream with the ramp up of the Volkswagen ID. Other models in this first wave will be the ID. CROZZ, the SEAT el-born, the ŠKODA Vision E, the ID. BUZZ , and the ID. VIZZION.

In order to support the electric offensive, LG Chem, SKI, CATL and Samsung were selected as strategic battery cell suppliers. In view of the constantly increasing demand, Volkswagen is also taking a close look at possible participation in battery cell manufacturing facilities in Europe. Looking further ahead, solid-state batteries also have great potential. The goal is to enable an industrial level of production with this technology together with our partner QuantumScape.

At the same time, CO2 emissions at all plants are to be cut 50 percent by 2025 compared with 2010. The conversion of the power station in Wolfsburg from coal to gas will reduce CO2 emissions by 1.5 million tonnes annually from 2023 onwards. Audi’s production activities at the Brussels site, for example, are already completely CO2-neutral. The Zwickau plant will not only be the lead factory for the Modular Electric Drive Toolkit (MEB); the ID. built there will be delivered to customers with a CO2-neutral balance.

The MEB lies at the heart of Volkswagen’s electric offensive. The cost of e-mobility can be significantly lowered through partnerships to enable the widest possible spread of the MEB and the associated economies of scale. That makes individual mobility affordable and usable for the mainstream in the future as well. One example of such a partnership is the planned cooperation with Aachen-based e.GO Mobile AG recently announced at the Geneva International Motor Show.

To boost e-mobility further, we will be installing 400 fast-charging stations along Europe’s major roads and highways by 2020 in collaboration with industry partners in IONITY. 100 of these will be located in Germany. That means there will be a station every 120 kilometers. Elli (Electric Life), Volkswagen’s new subsidiary, will also offer wallboxes for charging at home, using green power – initially in Germany. In addition, there will be 3,500 charging points on employee car parks at all plants with further charging opportunities at dealerships.

Cadence Minerals Plc (KDNC) Acquisition of Lithium Assets in Australia

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY; “Cadence”) is pleased to announce that it has agreed to acquire three highly prospective assets in Australia that are in regions with proven high-grade lithium mineralisation. The mechanism to facilitate this acquisition is via varying binding investment agreements in place with Lithium Technologies Pty Ltd (“LT”) and Lithium Supplies Pty Ltd (“LS”) that Cadence entered on 11 December 2017 to acquire up to 100% of six prospective hard rock lithium assets in Argentina.

HIGHLIGHTS

  • Varying the agreements with LT & LS delivers Cadence with the opportunity to immediately start developing three highly prospective lithium projects in Australia, while still retaining Cadence’s exposure to the six assets in Argentina.
  • The acquisition covers three projects – Picasso (Western Australia – WA), Litchfield (Northern Territories – NT) and Alcoota (NT) – that are located  in regions with proven lithium mineralisation and supportive mining infrastructure
  • The Picasso project (license granted) is near Alliance Mineral Assets’ (ASX: A40; SGX: 40F; “AMA”) high-profile Bald Hill Mine in WA (note: AMA recently completed a 50:50 A$400m+ merger with delisted Tawawa Resources [ASX: TAW] & raised $40M to develop the  asset base)
  • Demonstrating exploration upside for Picasso, the Bald Hill Mine is producing a spodumene concentrate and has a JORC (2012) compliant mineral resource of 26.5Mt @ 0.96% Li2O; probable ore reserves at 11.3Mt @ 1.01% Li2O
  • The Litchfield project (license granted), located near Darwin (NT), is contiguous to Core Lithium’s (ASX: CXO) ground and has a JORC compliant mineral resource of 8.55Mt @ 1.33% Li2O for its Finnis project (for all six deposits)
  • Finally, the Alcoota project (license to be-granted) is circa 145km NE of Alice Springs (NT) and has seen comparatively limited exploration, though significant geochemistry samples from 10km south of the project returned assays of 10.2% & 9.6% Li2O , with evidence suggesting there is a pegmatite zone within tenure prospective for lithium mineralisation

Kiran Morzaria, Chief Executive Officer, added:

“The Board is delighted with this variation agreement since it will enable the exploration team in Australia to commence work immediately on developing prime lithium assets, starting with the Picasso project in Western Australia. Alliance Mineral Assets’ recently raised AU$ 40 million to develop its lithium assets in the region, including its high-profile Bald Hill Mine, which located as it is nearby to Picasso, underlines the opportunity and potential upside for Cadence 

More importantly, this transaction is strategically beneficial as the Australian projects were acquired without any material variation to the monetary value of the acquisition agreed over the six Argentina assets. At a stroke, this delivers Cadence three additional opportunities to create incremental value for shareholders while continuing to progress the highly prospective Argentina assets.”

OVERVIEW OF NEW AUSTRALIAN LITHIUM ASSETS

A more detailed summary of the key salient points for each of the lithium assets follows:

Picasso project, WA

The Picasso project is located 50km from the city of Norseman, which connects via rail to the southern Port of Esperance. Moreover, it is circa 40km south of the newly formed Alliance Mineral Assets’ (AMA) high-profile Bald Hill Mine. This region is well known for high-grade lithium mineralisation, with the formation of AMA (via a AU$400 million merger with now delisted Tawana Resources and AU$40 million in fresh exploration funding) providing demonstratable evidence.

Picasso’s proximity to the Bald Hill Mine (which commenced producing lithium spodumene concentrate in March 2018) is a significant positive feature since it is a high-grade economically viable deposit:

Ø The JORC (2012) compliant total mineral resource is 26.5Mt @ 0.96% Li2O (255.2k contained tonnes) & 149ppm Ta2O5 (8,600lbs contained); and;

Ø Probable ore reserves of 11.3Mt @ 1.01% Li2O (114.1kt contained) & 160ppm Ta2O5 (4,000lbs contained)

Further, demonstrating the region’s potential, Liontown Resources’ (ASX: LTR) latest drilling program (15km south of Picasso) has intersected excellent lithium mineralisation at its two projects: Buldania (41m @ 1.0% Li2O and 35m @ 1.2% Li2O) and Killaloe (58m @ 1.2% Li2O).

The Picasso project’s geology is very similar to occurrences in AMA’s and Liontown Resources’ ground, both of which both have proven lithium mineralisation. Specifically, the Geological Survey of Western Australia (GSWA) has mapped granitic pegmatites (which typically host lithium-bearing minerals such as spodumene) within the tenure.

Encouragingly, based on analysing GSWA maps, there are more outcropping granite units and mapped pegmatites in the Picasso project than AMA’s ground. Furthermore, significant weathering has potentially restricted identifying many more pegmatites at the surface, which demonstrates further exploration upside.

Litchfield project, NT

The Litchfield project is close to Darwin Port and supportive mining infrastructure but in a region considered mineral rich, yet materially under-explored. Litchfield is located in the Bynoe pegmatite field, which is known to host lithium mineralisation.

A huge positive for the Litchfield project is its proximity to its, Core Lithium, which has five demonstratable spodumene lithium deposits within 1-2km of the north-west boundary. These deposits, collectively called the Finniss project, have a JORC (2012) compliant total mineral resource of 7.25Mt @ 1.41% Li2O (excludes Sandras deposit further south).

Of these, the BP33 deposit, which is over 140m deep and 20-40m wide, has produced some spectacular intersections across several drill-holes:

  • 75m @ 1.68 % Li2O including 55m @ 1.97% Li2O
  • 36m @ 1.61% Li2O including 14m @ 2.05% Li2O
  • 49m @ 1.02% Li2O

Interestingly, a closer examination of satellite imagery along the western boundary confirms the geology is comparable, highlighting the prospect of contiguous mineralisation. Notably, this shows within the Litchfield project that there is high potential for lithium pegmatite bodies to be apparent.

While negligible exploration for lithium has been undertaken in the Litchfield project (explaining a dearth of drilling & geochemical results), the exploration upside is significant given Core Lithium has produced some of the best intercepts in Australia.

Alcoota project, NT

The Alcoota project is circa 145km NE of Alice Springs but has seen limited lithium exploration. However, recent rock chip samples indicate there is strong potential to uncover high-grade spodumene mineralisation. Notably, Northern Cobalt (ASX: N27), which has several projects in the region targeting lithium mineralisation, identified a new zone of pegmatites 12km long by up to 2km wide that extends into the Alcoota project from the SE boundary. Furthermore, directly 10km south in the adjacent tenure, assay results for rock chip samples returned respective grades up to 10.2% & 9.6% Li2O.

Overall, with granites and related pegmatite-intruded schist units extending into the Alcoota project (from the south), it explains why analogous lithium mineralisation is highly likely apparent.

Priority exploration targets

The geology team have already identified priority and secondary targets for exploration within each of the projects. Further, as the Picasso and Litchfield projects are already granted, the immediate focus will be to expedite updating desktop reviews and commence field trips for surface sampling and assay, followed by a ranking of priority drilling targets.

Details of the Transactions

Cadence has agreed a variation to the agreements with LT and LS. As previously announced (click here), Cadence can acquire 100% of Lithium Technologies Pty Ltd and Lithium Supplies Pty.

The variation will result in LT & LS acquiring between them 100% of Synergy Prospecting Ltd (“Synergy”), which owns the three lithium projects in Australia. As two of Synergy’s assets are granted, Cadence has agreed to move forward with increasing is ownership in LT & LS form 4% to 31.5% via:

  • Issuing 373,544,298 million Cadence shares to the founding shareholders of LT & LS valued at £400,000 (based on 14-day VWAP of £0.0107) to acquire a further 20% stake, which is in line with the terms of the original agreements; and
  •  £300,000 to earn an incremental 7.5% stake, with the funds earmarked to commence developing Synergy’s lithium assets in Australia.

The result of the variation would mean no change to the £ consideration to be paid for of LS and LT, however additional shares would be issued as a result of the change in the share price in Cadence between November 2017 and March 2019.

The principle terms for the acquisition for up to 100% of LT and LS is now as follows.

Stage

Ownership %

Total Ownership %

Total Consideration or the Acquisition of Lithium Technologies Pty Ltd & Lithium Supplies Pty Ltd

Purpose

Status

Cash Earn In £

Share Consideration Value £

Shares

Stage 1

4%

4%

100,000

Earn-in early non-invasive exploration (pre -exploration permits being granted)

Completed

Stage 2

20%

24%

400,000

373,544,298

On grant of exploration permits – acquisition of Lithium Technologies and Lithium Supplies shares

To be completed on Cadence payment of shares

Stage 3

7.50%

31.5%

300,000

Earn – in on commencement of exploration works after grant exploration permits

To be completed on Cadence earn-in expenditure

Stage 4

17.50%

49%

700,000

Earn – In on identification of suitable drill targets

Stage 5

51%

100%

1,750,000

1,634,256,305

1-year option to acquire all the outstanding share capital of Lithium Technologies and Lithium Supplies

Total

1,100,000

2,150,000

2,007,800,603

The exploration team in Argentina continues to progress developing the assets and working with the regulator towards securing approval to scale up the exploration program, then formulate the inaugural drilling campaign.

 

– Ends –

For further information:

Cadence Minerals plc

+44 (0) 207 440 0647

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

+44 (0) 207 220 1666

James Joyce

James Sinclair-Ford

Hannam & Partners LLP (Joint Broker)

+44 (0) 207 907 8500

Neil Passmore

Giles Fitzpatrick

Novum Securities Limited (Joint Broker)

+44 (0) 207 399 9400

Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

 

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Lithium Market Cheers as Top Supplier Sees Demand Driving Higher

  • Albemarle calms concerns about oversupply, weak Chinese demand

  •  Albemarle reported better-than-expected quarterly results
The world’s largest producer of lithium calmed investor fears of oversupply and slower Chinese demand for the mineral used to power electric vehicles, sending shares surging across the industry.Albemarle Corp.’s fourth-quarter earnings topped analysts’ estimates, and it expects global lithium demand to grow 21 percent annually, with the market remaining tight for years as manufacturing of electric cars and large-scale batteries soars. The company’s stock rose the most in almost three years on Thursday.

 The outlook comes little over a week after shares across the industry sold off as producer Livent Corp. reporteddisappointing results and said customers in China were delaying purchases. Albemarle said it sees no evidence of a slowdown, with sales of new-energy vehicles doubling in China last year and indications that demand for electric cars will continue to benefit from government incentive programs in the Asian nation.

Albemarle’s 2019 outlook helps calm investor fears of lower lithium prices from an oversupplied market, James Sheehan, an analyst at Suntrust Robinson Humphrey, said in a note. A 4 percent gain in prices in the fourth quarter, “supports our thesis that Albemarle can maintain stable pricing.”

Albemarle’s stock rose as much as 11 percent, the biggest intraday gain since May 2016. It was the best performer on the S&P 500 Index on Thursday. Santiago-based Soc. Quimica y Minera de Chile SA, the world’s second-largest producer, rose 2.4 percent for a second consecutive gain. Shares of Tianqi Lithium Corp., the third-largest, posted their highest closing price this year.

Concentrated Market – Three companies control over half of lithium supply

Charlotte, North Carolina-based Albemarle, which produces about a third of the world’s lithium, expects prices to remain flat or to increase this year. Prices for lithium carbonate, the most common form of the mineral, have fallen from historic highs, but still remain more than double the level of four years ago, according to monthly data by Benchmark Mineral Intelligence.

Global sales of electric vehicles soared 98 percent during the fourth quarter, Albemarle Chief Financial Officer Scott Tozier said Thursday on a conference call with analysts. The number of available plug-in hybrids and battery-electric models announced by automakers for 2021 has grown by almost 40 percent since mid-2017. As a result, demand for lithium carbonate equivalent will be about 475,000 tons by 2021 and 1 million tons by 2025, he said.

Large producers such as Albemarle, SQM and Tianqi will continue to dominate a space that might look oversupplied this year as new capacity comes in, Albemarle Chief Executive Officer Luke Kissam told analysts during the call. With new technologies demanding more lithium, the market will remain tight in coming years, he said.

“The momentum around electric vehicles has continued to accelerate,” Tozier said. “The demand curve has shifted higher and steepened,” he said, referring to lithium.

New lithium hydroxide factory in Western Australia wins federal approval – Via the Guardian

Plant set to boost local jobs and supply growing global demand for lithium, which is used in renewable energy storage

Earthworks for a new lithium hydroxide factory in Western Australia are expected to begin this month after the $1bn project received federal environmental approval.

The plant owned by the world’s largest lithium producer, the US chemical company Albemarle, was approved by the WA government in October and is estimated to create up to 500 jobs in construction, with another 100 to 500 operational jobs once it is operational.

Australia’s trade minister, Simon Birmingham, said the plant would provide a much-needed local jobs boost and supply a growing global demand for lithium, which is used in renewable energy storage.

“This is a welcome investment and vote of confidence in our local lithium industry that will help attract further investment into the future,” Birmingham said.

Albemarle announced on Thursday that earthworks at the site at Kemerton Strategic Industrial Estate, just north of Bunbury, were on track to begin soon.

“Achieving this milestone underscores our commitment and confidence in developing LiOH [lithium hydroxide] operations and in our overall strategy to drive significant shareholder value and meet our customers’ demands,” said Eric Norris, the president of Albemarle’s lithium division.

The plant will process spodumene ore from the Greenbushes lithium mine, about 90km south of the industrial estate, and produce 60,000 tonnes of lithium hydroxide annually with capacity to expand to 100,000 tonnes.

It will also produce a byproduct of up to 200,000 tonnes of sodium sulfate, and a million tonnes of tailings per annum.

The company has been ordered to identify a new breeding and foraging habitat for WA’s three threatened black cockatoo species – Carnaby’s cockatoo, Forest red-tailed cockatoo, and Baudin’s black cockatoo – to offset habitat lost by clearing the 89ha plant site, including 54ha of coastal plain vegetation that is home to a number of threatened native orchids.

The director of the Conservation Council of Western Australia, Piers Verstegen, said the environmental impacts of the project were “manageable”.

“We think on the whole it’s a positive development for the south-west and one that could provide an alternative source of employment to the coal-based jobs in Collie,” Verstegen said.

Collie, about 70km east of Bunbury, is home to four of WA’s five coal-fired power stations, fed by two open-cut coalmines.

The Albemarle plan will run on gas, but Verstegen said he hoped the company would look into running it on renewable power.

WA is the world’s largest producer of lithium, and the plant at Kemerton is the second significant lithium hydroxide manufacturing plant approved in the state since 2016.

The state established a task force aimed at promoting the lithium industry last year, and the premier, Mark McGowan, met with the directors of Albemarle on a trip to Washington DC in February.

By the Guardian

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