The Whabouchi mine site, in Quebec, Canada.
Canadian lithium project developer Nemaska Lithium appears confident that it will close a C$600-million investment deal with global investor Pallinghurst Group to complete the over-budget Whabouchi mine and Shawinigan electrochemical plant in Quebec.
Nemaska CEO Guy Bourassa said on Tuesday that the company had worked “assiduously” with Pallinghurst on the investment proposal.
“. . . we have every reason to believe that we have met all their requirements from a technical due diligence standpoint,” he said, adding that Nemaska was working with its advisers to help Pallinghurst complete its entire review in a timely manner.
The parties have agreed to extend the exclusivity period to the end of December.
Pallinghurst cofounder and MD, Arne Frandsen, said that the group had been impressed by its review of Nemaska Lithium.
He said that Pallinghurst would be open to explore with Nemaska’s largest shareholders an additional capital injection to potentially substitute certain elements of the current financing structure.
The parties announced in July that Pallinghurst is contemplating a C$200-million private placement, at C$0.25 a share, and a standby purchase agreement to fully guarantee the successful completion of a rights offering of up to C$400-million, at the same price.
“Based on our due diligence review thus far, we continue to believe that Nemaska Lithium has a world-class spodumene deposit, a proven lithium salts patented process, as well as a highly qualified workforce. These assets position Nemaska Lithium as a key player in the rapidly growing lithium-ion battery and energy storage industry.
"We continue to focus on developing key strategic partnerships across the different battery materials, and we believe that, for lithium, Nemaska Lithium is the right partner with whom this strategy should be pursued," said Frandsen.
Over the life-of-mine, the Whabouchi mine is expected to produce seven-million tonnes of spodumene concentrate, which will be converted into 770 000 t of battery-grade lithium hydroxide and 361 000 t of battery-grade lithium carbonate.
Nemaska in February said that it needed about C$375-million to complete the project and adjusted the pace of development.
The company reported on Tuesday that by August 31, it had incurred capital expenditure of C$377-million on a total Whabouchi project budget of C$1.27-billion. It has incurred about 55% of the expenditures at the Whabouchi site, and about 16% of the expenditures at the Shawinigan site.
“Even at a reduced pace of work, progress at the Whabouchi mine has been significant and demonstrates the quality and effectiveness of our construction and operations teams. In Shawinigan, detailed engineering is on schedule, and the Phase 1 plant steadily delivers to potential clients as our team continues to improve our processes in preparation for the commercial phase. The dedication of our team to make a great success out of this project remains unwavering,” said Bourassa.