Lithium Australia (ASX:LIT) talks lithium projects and outlook

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by David Chau

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Last Updated: 12/12/2019 3:59 PM

Lithium Australia Limited (ASX:LIT) Managing Director, Adrian Griffin talks about the company’s lithium projects in Australia and North America and its processing technology Sileach


Lithium Australia Limited (ASX:LIT) was the first mover in the lithium space in Australia. We started in the game about three years ago and we recognised an opportunity that I think no one else recognised. We looked at what was happening with lithium on a global basis, and found there was more going to waste and more stranded deposits, than was ending up in the lithium-processing stream. Why was that? Simple - processing cost.

So we started looking at processing technologies with a low energy footprint and see if we could offer something that was a much better alternative. And indeed, we’ve done that. In putting that together, we had to foster a number of partners. They include government and free enterprise, the likes of ANSTO The Australian Nuclear Science and Technology Organisation, Murdoch University and Pilbara Resources Limited (ASX:PLS). Together with those and others, we’ve put together a commercialisation package to provide people with a much better processing solution. In doing that, we’ve also put together a tenement portfolio that we can lever off and we’ve provided an enormous amount of advantage to shareholders in doing so. So we think we’ve got it right.

The first thing you’ve got to realise is that our plan is to develop a number of processing hubs. Not only on an Australian basis, but globally. And those hubs will feed off other peoples’ material to a large extent, using a low energy footprint and alternative processing technology. And we can take material that other people see as waste. Now that’s our major lever to get equity in other projects. However, that does de-risk many aspects of your business, such as mining capital, resource risk and other bits and pieces. However, it doesn’t save you from the risk of supply and you can have no better insurance than alternative supply.

So what we’ve done is put together a portfolio on a global basis that can provide supply long term, into any one of those processing hubs. So that gives us exposure in Western Australia, Northern Territory, Queensland, Mexico, Canada and we’re having a very good look in Europe.

Sileach is not the only processing technology that Lithium Australia is commercialising, but it is the most advanced. At the moment, we’re pilot testing at ANSTO in Sydney and the results of those pilot tests, should be available within about two months. The process has a very low energy footprint. It’s capable of processing spodumene, which is a world first and also capable of processing any other lithium silicates. So it’s a very versatile process with a low operating cost.

To a large extent, it’s all about shareholder value, but we recognise that Lead Generation had some outstanding assets in Canada, and we believe that it’s a perfect synergy for our technology. And we can provide them a technological answer, to processing their material that no one else can. They’re primarily spodumene, so what we’re looking at is providing a low energy, low cost processing alternative for spodumene. If you compare the technology that we’re using with conventional technology, conventional technology’s Pryrometallurgical, it’s like shovelling dollar bills into a furnace. We don’t have a furnace.

We’re sitting pretty good at the moment with a bit over $5 million in the bank. And as a consequence of our fairly unique capital structure, we’re a no liability company, we have drawdown facility in contributing shares of another $35 million, or thereabouts.

We want to be well down the commercialisation path of not only Sileach, but also leaner technology, which is an alkaline leach technology as opposed to Sileach, which is a halogen technology. So we want to be well down the commercialisation path for both of those and be very close to committing to the first commercial plant. Now we believe that’s incredibly important, because we can see a structural change in the industry occurring not long after that, in fact I’ll pin my bets on the 14th of August 2019. And there’re going to be big changes in the industry, and we need to be set well and truly before that.


Ends 

David Chau

Finance News Network
David joined FNN in April 2016. In addition to presenting the Market Outlook and latest business news stories, David interviews senior economists and CEOs of ASX-listed companies. Prior to working for FNN, David was a litigation lawyer.