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Lithium pioneer Iggy Tan returns to the sector

Published May 30, 2023 15:59 Updated May 30, 2023 16:30
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© Reuters. Lithium pioneer Iggy Tan returns to the sector

Lithium pioneer Iggy Tan has re-entered the lithium scene after a 10-year hiatus.

Tan, who is currently managing director of battery company Altech Batteries Ltd (ASX:ATC), will join Lithium Galaxy Ltd as chairman.

Subject to shareholder approval Lithium Galaxy will own the promising Apollo Lithium Project in James Bay, Canada.

The name of the company is Tan’s cheeky reminder to the lithium industry that he can do it again.

The success of the new venture hinges on the approval of shareholders of a listed gaming company shell (Mogul Games Group), which is planning to transform into a lithium exploration and development company. To facilitate its relisting, Mogul intends to generate up to A$4.5 million (before costs) through a public offering.

Lithium pioneer Iggy Tan.

One of the first to identify lithium opportunity

Twenty years ago, Tan became one of the first Australian mining executives to identify a significant opportunity within the emerging lithium-ion battery sector, when he spearheaded Galaxy Resources Ltd (ASX:GXY).

He built the Mt Cattlin Spodumene Mine (137,000 tonnes per annum) and the downstream Jiangsu Lithium Carbonate Project (17,000 tpa), with Galaxy becoming the first large-scale integrated mine-to-refinery project.

Tan also acquired the James Bay Spodumene Project in Canada and the Sal de Vida Brine Project in Argentina for Galaxy. He left the company in August 2013.

The Jiangsu Lithium Carbonate plant was sold to Tianqi Lithium Corp for US$260 million in 2014 and the north portion of the Sal de Vida project was sold to POSCO for US$280 million in 2018.

At the beginning of Tan’s time at Galaxy, the company's market capitalisation was less than A$10 million but grew to A$2.5 billion at the merger with Orocobre Ltd to form Allkem in August 2021. In May 2023, Allkem merged with Livent in a $15.7 billion deal, creating a dominant force in the lithium industry.

Tan’s previous experience working with lithium dates back to the early 1990s when he managed the Greenbushes Lithium Mine and commissioned the first Lithium Carbonate plant for Gwalia Consolidated.

Returning to where it began

Tan says the potential of the Apollo Lithium Project in James Bay is one of the reasons he was enticed to return to the lithium industry.

He is intimately acquainted with the district, having acquired the James Bay Spodumene Project for Galaxy in March 2012.

When Tan agreed to become the chairman of Lithium Galaxy, he emphasised the need for the company to prioritise the swift development of profitable lithium projects, instead of solely concentrating on lithium exploration.

He further stated that whilst there are many lithium explorers in the world today, only a handful have the necessary expertise and ability to effectively develop and construct viable lithium projects.

He said that his new company would have a rich pedigree of lithium experience to establish a spodumene-producing mine in Quebec, Canada, as quickly as possible.

Challenges to come

According to Tan, the lithium industry faces a significant challenge in the form of prolonged project development timelines. The process can take up to eight years, from initial resource discovery to the completion of feasibility studies, construction and eventual product launch.

However, with a proven track record of accelerating lithium projects, Tan believes he can do the same with Galaxy.

At Mt Cattlin, his team took the project from its first maiden resource through funding and construction to its first product in just three years, setting a record. Tan hopes to replicate the success at Mt Cattlin with the Apollo Lithium Project.

The strategic positioning of the Apollo Project, which is between two noteworthy lithium discoveries - Patriot Battery Metals' Corvette Lithium Project (29 kilometres to the northwest) and Winsome Resources' Adina Lithium Project (28 kilometres to the east) - is important.

Both of these companies have achieved significant spodumene discoveries, reflected in their market capitalisations. Patriot's value now exceeds A$1.4 billion, while Winsome stands at more than A$300 million.

Tan further emphasised that the Apollo Lithium Project shared the same greenstone belt as these neighbouring projects.

Despite this favourable context, Tan anticipates that the company's market capitalisation upon relisting will be relatively modest, estimated at around $12 million. Nonetheless, he firmly believes that the Apollo Lithium Project holds equal potential for success as its neighbouring lithium ventures.

Read more on Proactive Investors AU

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Lithium pioneer Iggy Tan returns to the sector
 

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