LG Energy strikes lithium deal in Canada

19th May 2023 By: Esmarie Iannucci - Creamer Media Senior Deputy Editor: Australasia

PERTH (miningweekly.com) – Canada-focused lithium developer Green Technology Metals has secured a A$20-million investment and offtake deal with global battery manufacturer LG Energy Solution (LGES).

Under a subscription agreement, LGES will subscribe for more than 21.7-million new shares in the ASX-listed Green Technology Metals, at a price of 92c a share, representing a 43% premium to the company’s 30-day volume weighted average share price.

Under the offtake term sheet, Green Technology Metals will sell LGES 25% of the spodumene concentrate produced from the Seymour lithium project, in Ontario, over a period of five years, starting from the beginning of commercial production.

In the event that Green Technology metals develops a lithium hydroxide conversion facility during this period, the company will deliver the equivalent lithia content to LGES in the form of lithium hydroxide.

The pricing for both spodumene and lithium hydroxide has been agreed based on a formula linked to the prevailing market price of lithium hydroxide. The parties have agreed to enter into a full form offtake agreement consistent with the terms outlined in the offtake term sheet by the end of August 2023.

Green Technology Metals told shareholders on Friday the agreement was a significant milestone for both companies and marked the first transaction from LGES upstream into lithium feedstock. It also represents a complete cycle in the battery manufacturing supply chain, with Green Technology Metals now supplying the raw battery materials to feed into LGES’ lithium-ion battery production plants in North America.

“We welcome the execution of these important agreements with LGES and look forward to their contribution as a new strategic partner with Green Technology Metals, alongside AMCI, Lithium Americas and Primero. LGES brings global scale and expertise in battery manufacturing as well as balance sheet strength as Green Technology Metals advances its integrated lithium strategy in the Tier 1 jurisdiction of Ontario,” said chairperson John Young.

The funds received will be used to continue the progression of Seymour through exploration and feasibility. The preliminary economic assessment remains underway and is now expected to be finalised and announced in the coming weeks.

Seymour is currently in the exploration phase and the commencement of commercial production at Seymour remains subject to, among other things, further Indigenous and community consultation, obtaining project finance and completion of technical and engineering studies in respect of the project.