Lithium Energy Ltd (ASX:LEL) has extended the sale of its 90% interest in the Solaroz Lithium Brine Project in Argentina by 60 days.
The company is selling its interest to CNGR Netherlands New Energy Technology B.V. (CNNET) for US$63 million (~A$97 million) in cash.
CNNET is a subsidiary of CNGR Advanced Material Co Ltd and one of the largest producers of precursor cathode active materials used by leading companies in the battery materials supply chain.
Completion of the sale
The sale is expected to be completed by October 25, 2024, once several conditions under the agreement are met or waived.
Some conditions have already been fulfilled, such as shareholder approval from Lithium Energy and necessary Chinese approvals for overseas investment and foreign exchange. However, a few important conditions are still pending:
(a) CNNET needs to be registered as a foreign company in Argentina to receive the transfer of shares in Solaroz S.A. This registration was filed in August 2024 and is being processed by the Argentinian authorities.
(b) Environmental and concession approvals for the Solaroz Project are still required. This includes approval of updated Environmental Impact Assessments (EIA) for planned exploration activities like drilling and installing water bores. These applications are in the final stages of review by local government agencies.
While these conditions might be met by October 25, 2024, CNNET has requested a 60-day extension until December 24, 2024, as allowed by the Solaroz Sale Agreement.
Attention turns to Axon
Following the sale, LEL will have the capital to consider investment opportunities in the battery minerals space and will also turn its attention to advancing the Axon Graphite Ltd (proposed ASX code: AXG) initial public offering (IPO).
In May this year, Lithium Energy and NOVONIX Ltd completed due diligence and agreed to proceed in combining their natural graphite exploration interests into a new company, Axon Graphite Ltd.
Ahead of the proposed IPO of Axon Graphite, LEL will acquire NOVONIX’s Mt Dromedary Graphite Deposit, which is directly adjacent to LEL’s Burke Graphite Deposit in Queensland.
Last month, the companies welcomed an updated mineral resource estimate (MRE) for the Mt Dromedary graphite deposit which will be a key component of the proposed spin-out.
As part of the IPO process, Axon conducted a review of the Mt Dromedary deposit, resulting in an updated MRE of 12.7 million tonnes at 14.5% Total Graphitic Carbon (TGC), containing a total of 1.83 million tonnes of graphite at a 5% TGC cut-off.
This includes an indicated resource of 8.3 million tonnes at 15.2% TGC for 1.26 million tonnes of contained graphite, alongside an inferred resource of 4.3 million tonnes at 13.2% TGC, accounting for 570,000 tonnes of contained graphite.
Additionally, a higher-grade resource of 8.5 million tonnes at 18.4% TGC has been identified, containing 1.56 million tonnes of graphite, based on a 10% TGC cut-off grade.