AQSE-listed Marula Mining has, together with its mining and processing contractor Southern Metal Processing (SMP), entered into an agreement with a South Africa-based subsidiary of global commodity group Traxys, under which the first $2.5-million of a $5-million lithium prepayment facility has been advanced for the purchase of high-grade lithium ore from the Blesberg lithium and tantalum project in South Africa.

A $5-million lithium prepayment facility has been signed for the purchase of the first two shipments of high-grade run-of-mine lithium ore produced from Blesberg.

An initial tranche of $2.5-million has now been advanced and received by the company and SMP.

The company will use $1.7-million of the funds to increase its ownership in Blesberg to 100%, subject to receipt of all necessary regulatory approvals in the UK and South Africa.

The decision to increase its shareholding in Blesberg to 100% comes at a time of record high lithium concentrate prices and demand, Marula points out.

The $800 000 balance is to be used by SMP to fully fund the first phase capital and working capital costs to bring the project into production of high-grade lithium ore from existing stockpiles on site at Blesberg.

Production of the first 1 000 t of high-grade lithium ore is expected early in 2023, while first sales are also expected by January 14, 2023.

The second tranche of $2.5-million is anticipated to be advanced in the first quarter of 2023 once the first sales have been made by the company to Southern Jade Resources.

SMP has successfully completed mineral recovery trials of the stockpiles and its management team is on site and accelerating all regulatory approvals and site works to allow the start of high-grade lithium ore production at Blesberg.

“This funding reaffirms our belief in Blesberg, and provides third party validation to our battery metals strategy and confirms Blesberg as a high-grade lithium asset that is capable of being brought into production quickly as a lithium producer, with sales to an international commodity trading group.

“To be able to secure this funding to both increase our ownership in this exciting lithium battery metal project and fully fund it into production is a testament to the strength of the Blesberg mine, the strong fundamentals of the lithium market and our strategy and focus on such advanced projects in Africa,” acclaims Marula CEO Jason Brewer.