Page 19 - IPO- Neat

IPos

Clean and lean makes for IPO success

ithium Energy Ltd (LEL) executive chairman other ASX listed com-
L William Johnson has attributed the com- panies, such as those
pany’s critical offering of ethically-sourced and in African countries
environmentally-clean graphite as the main that carry implied
reason for its stunning first year on the bourse. risks.”
Spun out of Strike Resources Ltd via a $9 Ethically-sourced
million IPO in May, the company debuted its critical battery miner-
stock at 47c and by year’s end was command- als are coming under
ing more than double the price. At the time of increasing scrutiny to
print, its shares were $1.22, a 158.51% premi- meet ESG require-
um to its listing valuation. Strike has retained a ments, as the compet-
43% interest in LEL. itive hunger may drive Lithium Energy’s Solaroz lithium project is located in Argentina’s
LEL offers two opportunities from its portfo- buyers to plot their in- lithium triangle, a hot property already housing production
lio – the 12,000ha Solaroz lithium brine project vestments away from
in Argentina and the Burke graphite project in jurisdictions with such
north-central Queensland. The latter holds a issues.
6.3mt @ 16% TGC inferred mineral resource. “We’ve indicated with our graphite project
“We took the decision about this time last that we want to develop a value-adding manu-
year to spin them out into a battery minerals facturing business of purified spherical graph-
company,” Johnson explained to Paydirt. “We ite [PSG],” Johnson said.
got a sense that the battery minerals sector “That would add considerable value to our
was taking off. The timing was perfect, and the business with a high-value product and given
share price has gone very well, one of the most our location of the project in Queensland…we
successful IPOs of the last year.” think we’re well positioned to take advantage of
Johnson believes LEL’s surging share price the opportunity. William Johnson
is largely owed to the Burke project striking a “There’s typically ten-times more graphite
chord with investors, rather than the fellow bat- in a lithium-ion battery than lithium itself. At the China’s hunger for the resource to fuel lithium-
tery mineral from which the company took its moment, most PSG is produced in China and ion batteries.
name. they sell that to the battery manufacturers. One The Solaroz project being adjacent to
“We have one of the largest, independent of the problems with that is Chinese compa- Allkem Ltd’s flagship operations (formerly Oro-
land holdings left in that Argentina ‘lithium trian- nies typically use nasty chemicals during the cobre), a company that has been producing for
gle’ salt lake, so naturally there’s a lot of interest processing. roughly five years now. Johnson said it was a
in that, but our graphite project in Queensland “Battery and EV manufacturers are increas- blueprint for success.
is also particularly exciting – it’s one of the ingly looking down their supply chains to en- “All the geophysics and exploration that
highest-grade graphite deposits in the world,” sure that things are being done in a sustainable we’ve seen from others, such as Orocobre
he said. way. There’s going to be a lot more focus on and Lithium Americas [Corp] who are our two
“Also, because it’s situated in Queensland, manufacturing techniques. neighbours on that lake, supports our theory
I think investors recognise it’s a safer jurisdic- “So, we see an opportunity here in Aus- that the lithium-rich brines that they’re tapping
tion than different graphite projects held by tralia to rather than just dig up the graphite and into produce lithium carbonate extends under
produce a concentrate to be sold to China for our concessions,” Johnson said.
value adding, we can do that value adding our- “It’s simply a matter of doing some geophys-
Lithium Energy Ltd selves here in Australia.” ics to first map out the underlying structure and
LEL is currently working on approvals to fi- drilling down to identify where those lithium-
ASX: LEL nalise drilling at Burke to upgrade the inferred rich brines are and then hopefully from there,
resource to indicated, with CSIRO also col-
Listing date: May 19 laborating with the company. we can put together a resource.”

Exploration at Solaroz is expected to start

IPO amount: $9 million “The work CSIRO is currently doing with this month after COVID restrictions stopped

Share price range since listing: 31c-$1.23 us is helping to identify the optimal process LEL from hitting the ground immediately on list-
for taking our graphite and sterilising it so we

Address: Level 2, 31 Ventnor Avenue, can move from concentrate production to the ing, despite Argentinian authorities reconfirm-

West Perth WA 6005 higher-value PSG product,” Johnson said. ing all technical aspects of exploration plans.

Johnson said the delays were due to a num-
Tel: +61 08 9214 9737 “We are also planning to do some drilling lat- ber of local community members being unable

Website: lithiumenergy.com.au er this year on another prospect about 100km to appear at the approvals meeting.

Social media: @LithiumEnergy_ south of Burke where we’ve done quite a bit “We’re expecting to get approval to start
of sampling and geophysics as well. We have

Email: info@lithiumenergy.com.au identified the opportunity to chase a resource work any day now,” Johnson said.

“[Once final approval happens] we’ll be get-
Key personnel: William Johnson similar to the one at Burke.” ting started on the ground straight away, which

(executive chairman), Farooq Khan Lithium carbonate and hydroxide prices should be very soon. We’ve planned both geo-

(director), Peter Smith (director) boosted 25% and 12.5% respectively in early physics and drilling to test the prospectivity.”

Focus: Lithium and graphite, Argentina January and broker Credit Suisse increased its

and Queensland forecasts off the back of those gains. Experts – Fraser Palamara
attribute the price climb to tight supplies and
Page 46 FeBRUaRY 2022 aUSTRaLIa’S PaYDIRT