Lithium Energy has snapped up the Mount Dromedary graphite project for $2 million to head a portfolio of Queensland assets with a combined 4.42Mt inventory of high-grade natural graphite.
It is going ahead with the purchase instead of a previously proposed spin-out of its own natural graphite assets along with Novonix’s Mount Dromedary project via an initial public offering.
Lithium Energy said the combination of Mount Dromedary and its adjoining Burke deposit created a clear pathway for development of a vertically integrated Battery Anode Material (BAM) manufacturing facility in Queensland.
The company also holds the Corella graphite deposit.
“The consolidation of the adjacent high-quality Burke and Mount Dromedary graphite deposits will create a world-class inventory of high-grade graphite to support the company’s plans to develop an Australian-based, vertically integrated battery anode material (BAM) business,” executive chairman William Johnson said.
“We expect significant operational synergies and economies of scale will be gained from the consolidation of these adjacent graphite deposits.
“Funding for the development of the BAM business was previously contemplated through a spin-out and IPO of the combined Lithium Energy and Novonix natural graphite assets, following which the company would have retained a 22 per cent to 29 per cent shareholding interest (depending upon the quantum of funds raised in the IPO) in the newly listed vehicle, Axon Graphite.
“With Lithium Energy now successfully securing a 100 per cent interest in the same combined graphite assets, the company will now consider a range of potential development pathways and alternative funding strategies for the BAM development.”
The Burke and Mount Dromedary graphite projects are located about 130km north of Cloncurry by road, while Corella lies about 40km west of Cloncurry.
The mineral resource estimate for the Mount Dromedary project stands at 12.7Mt at 14.5 per cent total graphitic carbon (TGC) for a total of 1.83Mt contained graphite (at a 5 per cent TGC cut-off grade).
The Burke deposit hosts a total indicated and inferred mineral resource of 9.1Mt at a grade of 14.4 per cent TGC for 1.31Mt of contained graphite. The Corella graphite deposit has a total inferred mineral resource of 13.5Mt at 9.5 per cent TGC for 1.3Mt of contained graphite.
Lithium Energy is preparing to undertake in-fill resource development drilling on the Burke and Mount Dromedary tenements, with plans to delineate a combined upgraded mineral resource for the deposits.
The company is also evaluating the development of a vertically integrated BAM business using high-grade graphite from its consolidated graphite deposits as feedstock material.
Lithium Energy envisages mining graphite initially from the combined Mount Dromedary/Burke deposits and producing a 95 per cent-plus TGC graphite flake concentrate at the mine site.
The graphite flake concentrate will then be transported to a BAM facility for processing to produce spherical purified graphite (SPG), which could be additionally surface coated to produce coated spherical purified graphite (CSPG).
It is proposed that these SPG/CSPG products would be sold for use in the manufacturing of lithium-ion batteries or battery energy storage solutions.