Q and A from ILC Q1) As we do not have very much percentage left in the properties in Ireland and Argentina is it your intention to keep what we have left or sell it to our partner ?
In brief:
Actually we have the very robust potential in capitalising on both projects. We are not diluting ILC, but stepping back in our ownership in order for Ganfeng - top lithium materials producer from China to invest capital advancing the projects.
In Ireland GF has to invest $10 m in order to gain in total 75% - 25% in the advanced project will belong to ILC. It will be very important assets in case if economic potential of the project will be confirmed.
In Argentina GF will invest $10 M with exploration loan of $2 M granted to ILC during that program in order to keep our 80% - 20% J/V stakes. In addition we have back in right for 10% in the project all the way up to FS stage.
Exploration is the very high risk / reward business. We have all business risks in place, but now you can count that one of the top lithium companies in the world has made their DD on our projects and are investing capital to develop them.
In a lot of cases you are raising capital to advance the project and than trying to find the buyer and/or the demand for it - we have it in place already.
Ganfeng is shipping lithium concentrate now from Australia and Lithium brine from Chile.
Ganfeng is closing its transaction buying lithium battery company in China now. Effectively ILC becomes part of vertically integrated lithium business.
Economic potential of our projects must be confirmed during these programs, but we have lithium enduser investing in them to develop potential source of Lithium in Ireland close the manufacturing base in Europe and in Argentina where China is establishing itself as the major partner now.
Q2) If selling the properties to Jiangxi Ganfeng Lithium or diluting the percentage we hold any further, how would we as shareholders stand to gain on our investment ?
KK: Both projects will be rising in its valuations in the event invested capital by Ganfeng will bring further positive exploration results and potential confirmation of economic resources. The smaller part of the project reaching that stage will have much higher value than now in that case.
Q3) As Argentina appears to have the largest and most accessible Lithium and other commodities is there not a plan in the work to exploit the holding there in the near future as Telsa ramps up its needs ?
KK: This plan is in effect now and we are finalising our J/V agreement with Ganfeng. Tesla Gigafactory can take up to 17% - 19 % of Lithium supply alone. LG Chem is building now its own factory in China for 100k lithium auto batteries per year. Further advance in EVs will bring even more demand for Lithium. In our case we are already plugged in into Chinese market - the largest auto-market in the world. Our main risk / rewards are now with our ability to advance positive exploration results and confirm the economic potential of our projects. Potential market is waiting for us already with the existing demand from our strategic partner Ganfeng Lithium.
Please do not hesitate to contact me for any further reference. You can follow the developments in our industry on my blog Kirill Klip.
Note, please do not treat my reply as investment advice and read our full legal disclaimer on the website.
Kind regards,
Kirill Klip.