Latin Resources Ltd (ASX:LRS, OTC:LRSRF) reports it has received numerous unsolicited offtake enquiries for its flagship Salinas Lithium Project in Minas Gerais, Brazil from key battery manufacturers, chemical converters, original equipment manufacturers (OEMs) and leading trading companies.
This interest has encouraged Latin to commence an offtake process to formally assess proposals and associated project financing opportunities for the Salinas Project.
The company is seeking to secure competitive offtake terms with a partner whose expertise and credentials can add value to Salinas and de-risk development.
Latin is also seeking funding proposals from potential offtake partners in exchange for offtake, with the proceeds to be used to progress the development of Salinas.
The company notes that the offtake process will run in parallel with key workstreams necessary to support a final investment decision for Salinas by the end of next year.
Macquarie Capital Australia Ltd has been appointed financial adviser to support Latin in structuring and securing offtake agreements and potential project funding from selected off-takers for Salinas.
Latin Resources managing director Chris Gale said: “Following extensive unsolicited interest, we are pleased to announce the commencement of a formal offtake partnering process for the Salinas Lithium Project.
“The PEA released in September 2023 defined an enviable production profile and now is a logical time for Latin to consider offtake partnering and potential funding to help de-risk the development and funding of Salinas.
“The offtake partnering process is another step towards our goal of bringing Salinas into production in 2026.
“Macquarie Capital is a leading advisor in the critical minerals space and brings particularly strong relationships across the lithium sector and battery supply chain. Macquarie will play a crucial role supporting Latin’s decision-making in securing any offtake agreement and funding.”
Preliminary economic assessment
The offtake process follows Latin’s recently completed preliminary economic assessment (PEA) for Salinas, which demonstrated a low-capital, two-phased operation delivering high-quality 5.5% lithium oxide spodumene concentrate and a 3% lithium oxide fine spodumene concentrate.
The combined phase one and phase two results detailed in the PEA include life of mine average production of approximately 405,000 tonnes per annum (55,068 tpa lithium carbonate equivalent) of SC5.5 and 123,000 tonnes per annum (9,125 tpa LCE) of SC3 over an initial 11-year mine life.
The project will require capital expenditure of US$253 million to deliver first production in 2026 in phase one, followed by a further US$55 million in phase two capital that Latin expects will be fully funded by phase one production.