St George Mining Ltd (ASX:SGQ) has secured $2 million in a strategic investment from Hongkong Xinwei Electronic Co., Limited, a wholly-owned subsidiary of Sunwoda Electronic Co., Ltd – globally recognised for its industry-leading credentials in the design and manufacture of lithium-ion batteries.
The MoU complements similar agreements St George has with global battery giant SVOLT Energy Technology Co., Ltd and leading battery investor Shanghai Jayson New Energy Materials Co., Ltd over the past month, underscoring market interest in the lithium potential of Mt Alexander.
This strategic investment underpins a Memorandum of Understanding (MoU) entered into by St George and Xinwei to consider partnering on lithium business opportunities.
It comes in the way of a placement of new SGQ shares at $0.086 per share.
“Exciting lithium opportunity”
St George executive chairman John Prineas said: “We are delighted to welcome the Sunwoda Group – a global company at the forefront of the lithium-ion battery industry – as a new and significant shareholder in St George.
“This strategic investment recognises the exciting lithium opportunity at Mt Alexander and further highlights St George’s strong success in developing key industry relationships with some of the largest and most important global players in lithium-ion batteries.
“Our strategic relationship with Sunwoda will strengthen our ability to both advance Mt Alexander and to potentially generate and partner on additional lithium projects in Western Australia, which is the world’s best hard-rock lithium address.
“Lithium is a critical element required to underwrite the multi-decade energy transition that is underway, which we believe assures strong long-term demand for this commodity.
“The key downstream relationships forged by St George will boost our company’s capacity to continue our growth ambitions in the lithium sector.”
About Sunwoda
Sunwoda is a high-tech enterprise specialising in the design, production and sale of lithium-ion battery cells and modules for use in a range of applications including mobile phones and laptops, electric vehicles and energy storage devices.
The company has seven manufacturing bases in China and abroad, technical centres in China, the US, Germany and Israel, more than 41,850 employees worldwide and a large global customer base.
In addition to its R&D and manufacturing operations, Sunwoda has investments across the entire supply chain for lithium-ion batteries extending from upstream mining to downstream electric vehicles and energy storage stations.
Strategic relationship
The MoU signed by St George and Xinwei establishes a framework for the parties to consider and negotiate on partnering on lithium-business opportunities, including St George’s flagship Mt Alexander Project in Western Australia’s northern Goldfields.
Key matters to be considered for the strategic relationship are:
- The establishment of a long-term strategic partnership for the potential supply by St George of lithium materials to Sunwoda including the first right of refusal for Sunwoda to no more than 15% of any potential production from Mt Alexander.
- Collaboration on the potential acquisition and development of lithium projects in Australia and other countries, except China.
The MoU has an initial term of two years and any specific arrangement or transaction agreed upon by the parties will be subject to further documentation and execution of definitive formal agreements.
Furthermore, the MoU is non-binding until a formal agreement is signed.