Lithium Australia (ASX:LIT) has successfully drawn down additional funding from the A$4.5m convertible note, issued by MinRes as part of the joint development agreement.
The company has also appointed Carnac Project Delivery Services as lead engineer for the demonstration plant engineering study. The delivery of this engineering study was also defined within the Agreement.
Lithium Australia looks forward to continuing its relationship with MinRes and aims to deliver positive results from the piloting activities in 2024. On successful completion of the pilot plant operations and engineering study, MinRes’ convertible note will convert into equity in a new 50:50 joint venture (JV) between MinRes and Lithium Australia, which will wholly own the LieNA technology going forward. The JV plans to license the LieNA technology to third-parties at a target headline gross product royalty rate of 8%.
Drawdown
Under the Agreement, MinRes will fund the Company on a quarterly basis in advance, adjusted for a reconciliation from the prior quarter. The drawdown of ~A$0.8m, received in January 2024, will cover agreed activities under the Agreement from the 1st January until the end of Q3 FY24, with funds allocated to piloting activities and the engineering study relating to the LieNA technology.
These planned activities build upon the progress made during Q2 FY24, including the assessment of spodumene samples provided by MinRes, preparation of piloting plant equipment and progressing a formal tendering process for the engineering study.
Appointment of lead engineer
Following the tendering process, Lithium Australia has now appointed Carnac as the lead engineer for the demonstration plant engineering study. Carnac is a multi-disciplinary engineering consultancy with expertise in sustainable mining, minerals, and chemical processing. As part of the engineering study, a specific size of the demonstration plant will be determined.
“We are excited by the progress we have made so far with our partner MinRes. The second drawdown from the convertible note follows from a successful Q2 FY24 and highlights our aligned ambition to continue developing the LieNA technology,” Lithium Australia CEO and Managing Director, Simon Linge, said.
“The appointment of Carnac and delivery of the engineering study will facilitate the development of the demonstration plant following the formation of a JV. We look forward to continuing our partnership and are on track to deliver positive results from the pilot plant during 2024.”