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Lithium Australia battery cathodes looking good

Lithium Australia’s proposed acquisition of a Brisbane-based Lithium-ion battery cathode developer known as the Very Small Particle Company or “VSPC”, has been boosted by news of strong test results from an independent laboratory in Germany.

Following the successful completion of due diligence last month, Lithium Australia is in the final stages of an all-scrip acquisition of VSPC, which values the unlisted public company at up to $12.5m.

Lithium Australia this week reported test results of coin-cells manufactured from VSPC’s Lithium iron phosphate cathode material used for grid and off-grid energy storage and e-bus applications amongst other things.

According to the company, Lithium-ion batteries built using VSPC’s Lithium-ion phosphate cathode material do not have safety concerns such as overheating and explosion that can sometimes be a problem for standard built Lithium-ion batteries.

They also have 4 to 5 times longer cycles and 8 to 10 times higher discharge power.

Testing by independent German laboratory Custom Cells Itzehoe found the VSPC batteries performed well, with good cycling stability and high discharge capacities compared to standard reference material.

The new test results are a boost for Lithium Australia and their plans to build a unique business by combing their breakthrough SiLeach Lithium processing technology with VSPC’s technology. SiLeach is a patented process for the economical production of Lithium Carbonate from low-grade hard-rock minerals. The solutions produced by SiLeach can then be taken a next step by VSPC’s technology to produce high-value cathode materials for Lithium-ion batteries.

This marriage of technologies creates an opportunity for direct production of cathode materials, potentially removing two process steps involved in the manufacture of cathode materials.

The share swap terms of the acquisition means VSPC’s current shareholders will be able to share in the upside of the new business to be created by Lithium Australia. With Lithium Australia shares rallying over the past month, the notional value of the offer for VSPC shareholders has soared from $7.3m to $12.5m since it was announced on 30 August.

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