LCME (ASX:LI3) updates its ASX listing prospects and plans


by Carolyn Herbert

Transcription of Finance News Network Interview with Lithium Consolidated Mineral Exploration Limited (ASX:LI3) CEO, Shanthar Pathmanathan

Carolyn Herbert: Hello I’m Carolyn Herbert from the Finance News Network and joining me from soon-to-be-listed lithium explorer, Lithium Consolidated Mineral Exploration Limited (ASX:LI3) is CEO, Shanthar Pathmanathan. Shanthar, welcome back.

Shanthar Pathmanathan: Thank you Carolyn, absolute pleasure to be here.

Carolyn Herbert: LCME is looking to develop lithium brine projects in Nevada. Can you tell us a little bit about these projects?

Shanthar Pathmanathan: LCME is a lithium exploration company; our focus is on lithium brine, in particular in Nevada. We’ve got two key projects in Nevada, the Tonopah lithium project and the Teels project. We’re currently the largest landholder for lithium in Nevada today. Nevada has very special geological conditions for lithium brine mineralisation. Nevada is one of four places with existing lithium brine production. The other places are China, Chile and Argentina. We prefer to be in Nevada, Nevada lithium brine in Nevada is our advantage.

Carolyn Herbert: Now to your IPO, you’ve scaled it back to $5 million. Can you tell us a bit more about this decision?

Shanthar Pathmanathan: We decided we didn’t need the $8 million to $9 million of capital. Our focus needs to be on the Big Smoky Valley. At the Tonopah lithium project in the Big Smoky, we’re expecting significant drill results in the Big Smoky very soon, in the next few months. The position was taken to reduce the size of the budget to $5 million, to specifically focus in on the Big Smoky project. The move has been supported by Sequoia Financial Group (ASX:SEQ) our lead manager, key investors in the IPO. And since indeed, been very well received by the market.

When the change was made, we had something like $4.3 million in applications. I can tell you that we have moved significantly from that number. The market has been very positive on the change and quite frankly, we don’t want to be issuing too many shares at the current share price. That was the key reason behind the change.

Carolyn Herbert: To recap, what will the company’s market cap be now upon listing and when do you expect to list?

Shanthar Pathmanathan: At a $5 million capital raising under the IPO, the market capitalisation on a fully diluted basis, would be $19.9 million. On an undiluted basis, it would be $17.6 million. We expect to list the company on the 17th March this year. The shares will start trading on the 17th March this year, on the ASX.

Carolyn Herbert: What’s the plan for the next 12 to 18 months starting with your Nevada projects?

Shanthar Pathmanathan: We’ve got two projects in Nevada. The plan is to do some seismic on those projects; the seismic would support the gravity and conductivity data that we have. The seismic will assist with accurately locating the wells to hit the thickest parts of the reservoir. The drilling campaign would involve two wells at the Tonopah lithium project, a single well at the Teels Marsh project. We expect to begin drilling in three months from listing and we’ll be drilling continuously from that point on. We are planning to have a JORC resource, a maiden JORC resource in nine to 18 months from listing.

Carolyn Herbert: What about your Western Australia and South Australia projects?

Shanthar Pathmanathan: The WA and South Australia projects will essentially be put on the backburner, under the revised budget. We’ll be doing a minimal amount of work there. I will be going through the Native Title process and also the permitting processes there. But quite frankly, it would be put on the backburner for the time being.

Carolyn Herbert: Tell us about your Botswana project?

Shanthar Pathmanathan: In Botswana Carolyn, we’ve got a significant project. We have 5,600 square kilometres over one of the largest saltpans on earth. It is downstream from very high-grade lithium, hard rock mineralisation in Zimbabwe. It has spectacular opportunity, but it is very early stage. What we will be doing there is some surface sampling of the salts. The geology is very similar to the geology in South America, the lithium brine geology in Chile and Argentina. Again an early stage project, but a huge opportunity for the company.

Carolyn Herbert: So which of your projects is production most likely to occur first and when?

Shanthar Pathmanathan: That’s going to be in Nevada. In Nevada today there is one lithium brine mine and that is the only lithium brine mine in North America. We have the land and basin position in Nevada. We’re the only company with both the land and basin position, to be able to develop a standalone lithium carbonate facility. This’ll be the second lithium carbonate facility in Nevada and in North America. We expect to be able to develop this in three years in Nevada.

Carolyn Herbert: Where do you see your lithium brine concentrate going?

Shanthar Pathmanathan: We won’t be producing a concentrate; we’ll produce the end product on our property. That’s the key difference with our company and with lithium brine in particular. So we’ll be focused on delivering new lithium carbonate capacity, lithium carbonate and lithium hydroxide capacity in Nevada. There are very few companies on the ASX with a clear pathway to lithium carbonate, production capacity.

The hard rock companies are challenged by very very high operating costs, the companies with the clay resource essentially have a stranded asset. There is no technology today to be able to produce lithium carbonate from clay. We have a clear pathway in Nevada to be able to develop a lithium carbonate facility, from lithium brine.

Carolyn Herbert: Finally Shanthar. Where would you like to see LCME by the end of the year?

Shanthar Pathmanathan: We’re going to be one of four listed lithium brine companies on the ASX, very well positioned. We’ve got a terrific portfolio, a terrific team and a very tight capital structure. We see the share price going up significantly upon listing. We’re expecting very very strong drilling results from our lithium brine projects in Nevada, exceptional results in lithium brine. We’re going to have a terrific year going forward, we’re looking forward to it.

Carolyn Herbert: Shanthar Pathmanathan, thanks for the update.

Shanthar Pathmanathan: Thank you, thanks for having me.


Carolyn Herbert

Finance News Network
Carolyn joined FNN in August 2015 as the Head of News and also presented the Market at Midday and the Market Wrap. With more than five years of broadcast journalism experience, Carolyn has worked as a finance anchor on the Sky News Business channel and as an anchor and reporter for ABC News. She is also a qualified corporate lawyer specialising in IPOs, takeovers and mergers and acquisitions.