Lithium Australia have successfully wrapped up due diligence on the Very Small Particle Company and see breakthrough potential in merging VSPC’s patented cathode production technology with their own SiLeach process. The merger has the potential to create a single flow sheet from low-value Lithium minerals through to next generation cathode materials, with less steps than rival producers.
Lithium Australia’s highly strategic acquisition of the Brisbane-based Very Small Particle Company or “VSPC” is now only subject to shareholder approval after the successful completion of due diligence.
In a release to the ASX this week, Lithium Australia reported they had been through VSPC with a fine-tooth comb and made the decision to proceed with the takeover.
Management highlighted the transformational nature of the marriage between the two firms which will effectively close the loop in the Lithium cycle for Lithium Australia.
VSPC have developed a patented process for nano-scale manufacturing of a wide range of cathode materials for Lithium-ion batteries. This high quality material is regarded as a next-generation cathode material.
Lithium Australia’s most advanced technology is the SiLeach process, designed to economically extract Lithium from micas and other low-value source rocks. It achieves this without the energy intensive and high-cost roasting step used in conventional processing.
The due diligence has highlighted the perfect match in the marriage of these two technologies. The VSPC technology begins with cathode metals in a solution from which the cathode nanoparticles are precipitated. These solutions are compatible with those produced by SiLeach during the processing of hard-rock minerals to recover lithium carbonate, or lithium hydroxide.
The coming together of the two technologies creates an opportunity for direct production of cathode materials from SiLeach extraction of Lithium, potentially removing two process steps involved in the manufacturing of cathode materials.
The cathode materials are even higher up the value chain than Lithium Carbonate and Lithium Hydroxide, and would set a new highwater mark for processing of Lithium in Australia.
Lithium Australia reported they were investigating the seamless production of cathode materials from hard-rock minerals using hydrometallurgical front-end processes including SiLeach and the LMax process licensed to Lithium Australia by Lepidico.
Engineering studies on both LMax and SiLeach processing plants are well advanced and the company anticipates a commitment to construct plants early in 2018. The plants will be nominally sized at an output rate of 2500 tpa of Lithium Carbonate equivalent.
The run of positive news from Lithium Australia in recent weeks has sent the company’s share price soaring, up from 12 cents when the VSPC deal was announced on 29 August to 17.5 cents on Monday. This has increased the maximum value of the all-scrip acquisition from $7.3m to $10.7m, and certainly added to its appeal for VSPC’s shareholders.