Promising Prospects for New Liberty Lithium Brine Project


by Paul Sanger

Paul Sanger: We're talking today with QX Resources, ASX code QXR. QXR has a market cap of around 23 million. QX Resources is focused on exploration and development of battery minerals with hard rock lithium assets in a prime location of WA. Lithium Brine project in the USA, copper, molly and gold assets in Queensland, and a strategic investment in nickel sulfides in Sweden. We're talking today with their CEO, Steve Promnitz. Steve, welcome back to the network.

Steve Promnitz: Thank you very much for the opportunity.

Paul Sanger: Now, Steve, you just completed a private placement to assist the funding of your Liberty Lithium Brine project in the USA that you recently acquired. Firstly, congratulations on the successful placement. No easy task in the current market environment. Let's start off, can you talk us through how the process went and what type of investors did you manage to attract to the private placement?

Steve Promnitz: It is quite difficult in the current market. A little more than I guess what I expected or my chairman expected. I was able to find people that had followed me before and people in the US that were prepared to support this. And then when we went live, we went to a number of others. We didn't really use brokers except from a piecemeal basis, but we've got some good people here to back it, so I doubt that you're going to see the stock just sort of turning back up again. And this time we elected not to have an attached option. One of the investors we brought in is actually in the US batch of material supply chain as well. I'm not at liberty to sort of say exactly their involvement, but they're part of that whole supply chain developing a plant and so we got them to pony up as well.

Paul Sanger: Steve, can you walk us through what you intend to use with the funds that you just raised?

Steve Promnitz: The key use of funds is to get the first two drill holes done as soon as we possibly can and we get brines out of those holes. We basically demonstrate that there are aquifers there, that there are brines in the hole and then we get those assayed to demonstrate there's lithium and we get some test work done to see how that pans out. That's the first thing and I'm hoping to get results as soon as we can.

Paul Sanger: And look, in addition to the placement, you also announced that you are into an at the market subscription agreement, better known as an ATM facility with Dolphin Corporate Investments. Look, while ATM is a common practice in the US, not so much in Australia, can you walk us through the details of the ATM and what benefits it'll bring QX going forward?

Steve Promnitz: Yeah. You're absolutely right. Pretty much anybody in the US that's in tech, that's in battery minerals, that's in biomed, they have an ATM facility. Tesla has one $5 billion in size. The benefit is it just sits there and actually doesn't do anything. You're under no compunction to actually use it. But if you find that you get some great results or there's a lot of interest, I will be marketing in the US as well. And so you see a large increase in volume, then you can open that facility for a period of time, it just buys on market and then you come out and say, oh by the way, we've raised another million, $2 million in the market. There's no major penalty that you're not going around brokers or fund managers and seeing the share price drop down, it's basically just it gets all done and you announce, okay, I've got another $2 million in the can. That's how an ATM works, that's why they're good. I used them in my last shop. It worked very well and they're increasing in popularity now in Australia.

Paul Sanger: I guess one way you could think about it is if you do get positive results out and the stock does start to react, actually you can provide liquidity to investors via the ATM to purchase stock on market.

Steve Promnitz: Indeed, it actually facilitates that whole process. There's a whole feedback loop there, which is beneficial for both sides.

Paul Sanger: Okay. And you mentioned earlier that some of the funds are going to be used to start a drilling campaign at the Liberty Lithium Brine project. How quickly do you think you can get those rigs on site and start drilling? And probably more importantly, when do you think investors can see the early results from those early drilling?

Steve Promnitz: We're in negotiations with three companies at the moment, and it's not just a matter of getting a rig, we want to get the right rig with the right personnel manning it that have done these sorts of things in salt lakes, and then we put around the sampling process. I will know fairly soon, but I'm not certain if it's two weeks or six weeks when we start. But the aim is to get some results out before this side of Christmas. I at least want to show that we've got the right sort of brines and then it'll be in January before we can show the level of lithium in them and also some test work.

Paul Sanger: Is it fair to say that in the US actually getting drill rigs, getting them to location, it can be a lot quicker than it would be in Australia?

Steve Promnitz: There's a lot of activity as well, particularly for good drilling companies, but we're talking to two and we hope to get one of those soon.

Paul Sanger: And to finish up, with the funds that you raise, are there any plans to use those funds on some of the other assets?

Steve Promnitz: Yeah. As your listeners will know, we've got some lithium pegmatites in Western Australia in the Pilbara. And we made an announcement about six weeks back about finding a whole new swath of pegmatites there. Since that time, another company has announced some very good-looking pegmatites right next door. We want to get those initial results back and I want to put some money towards identifying them and then hopefully actually doing some bulk sampling of those before we do any drilling.

Paul Sanger: Okay. And last of our questions, Steve. Now you raised these funds, I presume that the Liberty Lithium Brine project is going to be completed, signed, sealed, and delivered and announced shortly?

Steve Promnitz: We announced all of the key terms just a few days ago, so we're on track with that. It did take quite some time to put together, but the reason was we wanted to do all the due diligence, consolidate the title, make absolutely certain with the regulators we can get it permitted. The great part about all this now, this project has got real scale, it's in the right neck of the woods, and if we find what we expect to find, then we are well on the path to getting it permitted. I've been having discussions with a whole number of participants in the supply chain in the US. They're desperate to see some sort of domestic supply. I think we could be very well positioned with this.

Paul Sanger: Steve Promnitz, many thanks for your time today.

Steve Promnitz: Thanks so much. Cheers.


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