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Three years from the day of International Lithium IPO have passed away very fast, but we have made a lot of very hard work behind the scenes of our public releases to advance our assets. This month we are celebrating our IPO Anniversary by advancing major deals with our strategic partner from China Ganfeng Lithium.
Lumina copper is in the news these days - this project is located in Salta province in Argentina, our Mariana Lithium Potash Brine project is located in the same province. Withgood news coming out of Argentina for all mining companies I am looking forward to advance our projects and place our company at the appropriate level in the market place properly reflecting our fundamentals. I would like to share with you my vision on our recent developments in our latest Podcast.
Hot Winter In Argentina: Copper M&A, TNR Gold Los Azules - Lumina Copper Hits 52 Weeks High
The winter is coming, but investors' hearts are warming up to the best Argentina's mining stories. I will not jump here to any conclusions: whether this action is ignited by Barrick Gold's Pascua Lama developments or particular news coming with Lumina Copper. Taca Taca copper project is for sale and somebody is buying shares now. Let's wait for the official news from the company.International Lithium: Presentation Of Our Strategic Partner - Ganfeng Lithium.
In any case this development is very encouraging for all of us involved in mining in Argentina and proud hard working people living there deserve much better economic progress. Maybe we are witnessing the beginning of such change. Political risk perception yesterday can be translated in the value catalyst tomorrow. It will be very positive for our International Lithium Mariana Lithium Brine project development with Ganfeng Lithium now as well.
Is my Tenke Fungurume experience in DRC with Lukas Lundin coming here back for Los Azules in Argentina? We will see very soon, hopefully. He has taught me that governments come and go, that political situation and its perception can change on a dime for better or worse, but you cannot "print", QE or find new world class copper projects overnight. We have seen the bad all together already, I am very encouraged that the mining cycle is turning now. Read more."
I would like to share with you today the presentation about our strategic partner from China - Ganfeng Lithium. This partnership is the very important step for International Lithium and solidifies our business relationships. This company is one of the top Lithium Materials producers in the world. We have the new page on our website devoted to our strategic partner and you can follow the link for more information.
Ganfeng Lithium has developed technology to process the raw materials that we aim to produce and has an expanding customer base world-wide for their finished products. This Vertically Integrated Business structure gives International Lithium security in the market and expertise for materials processing side of future feasibility studies. It also gives International Lithium confidence in moving the projects forward as our partner is actively pursuing vertical integration within their business model.
Together with Ganfeng Lithium we are building Vertically Integrated Lithium Business. It is becoming increasingly important for the lithium product manufacturers to control the quality of feed material in their operations. We expect that our relationship with Ganfeng Lithium will only grow from here on. The recent announcements are testament of the commitment to drive the next stage of growth with Ganfeng Lithium.
International Lithium has successfully secured the Capital to advance our joint venture projects and continue the exploration on the Blackstairs project in Ireland and Mariana project in Argentina.
Two key agreements have been reached with Ganfeng Lithium:
▪ GFL has pledged to invest US $10M in the Blackstairs project in order to acquire an additional 24% in the property. (for details see the April 04 2014 news release).
▪ The companies entered into a loan conversion and investment agreement on the Mariana Lithium brine project (for details see the April 04 2014 news release) which will establish J/V operations with 80% / 20% between Ganfeng Lithium and International Lithium respectively.
▪ International Lithium will receive 2 M exploration loan from GF which can be repaid from royalties or other proceeds from Mariana project which will be attributed to International Lithium. Effectively we will keep 80% / 20% J/V structure for the next round of $10 M project development, which should bring us to the resource definition stage and early stages of PEA studies.
▪ International Lithium also has an additional 10% Back-In right in Mariana project at the FS stage.
Ganfeng Lithium recently commissioned a new facility in China adding 500mt/y Li metal to its current 1000mt/y Li production capacity. The company exports and produces over 20 specialized lithium products for various applications worldwide. This includes Li metal batteries for which GFL has developed a breakthrough technology that shortens the industry standard production process. With working capital now available, we can concentrate our efforts on completing the resource definition and economic assessment on our projects.
We live in the exciting times during Electric Cars rEvolution. Tesla's plans to build Lithium battery Gigafactory have ignited interest to all our industry. They have received further confirmation now with the announcement that Panasonic has signed the letter of intent to participate in the project. Elon Musk has announced that Gigafactory Site Will Break Ground next month.
Due to the unique specific chemical qualities Lithium based chemistry for the batteries has become the automakers' industry standard for their Electric Cars. Decades of research and billions of dollars invested in Lithium Technology have made it possible now. Tesla will invest 5 B in the Gigafactory and there are recent reports projecting the Lithium Battery growth into 26 B industry within next decade.
Goldman Sachs estimates that Gigafactory will potentially consume 17% of the current Lithium supply. Add to it Nissan and its partner Renault, BMW, Mercedes, WV Group, GM, BYD, KANDI and other names from China, which we are going to hear more and more - you will get a picture of dramatic increase in Demand for High Purity Battery grade Lithium.
In International Lithium case, we have the existing demand for our potential future production of Lithium already. Ganfeng Lithium ships now Lithium raw materials from places as far as Australia and Chile to China. For us the general growth in the Electric Cars and Mobile Devices is more important: we do not have to find buyers for our potential products in the future - we have existing demand from our strategic partner in place already. We can concentrate on our Lithium projects development, resource definition and confirmation of their economic potential.
Pollution-hit Chinese city gets packaged fresh mountain air
I find it particularly encouraging that this year all major automakers have announced J/V plans to produce Electric Cars in China. Chinese government has declared war on pollution and we are proud to be part of such a noble case: to keep the air clean to breath, but allow personal mobility in most densely populated urban centres in the world. We are talking here about mass market for Electric Cars. Now we have the Lithium battery technology to make it happen. International Lithium works on the security of Lithium supply for this Electric Revolution.
Talking about Lithium demand, I have to mention the rapid growth in Alternative Energy. Solar and Wind Power will provide further increase in demand for the Secondary Storage, Lithium Battery technology advancing in this field very fast these days. Autonomous Robotics systems will be another very important customer in the future for the Lithium Industry.
Our partnership with Ganfeng Lithium places our company at the forefront of this technological rEvolution. How International Lithium shareholders will benefit from this partnership? These transactions have allowed us to cancel approximately US $3.3M in loans plus interest indebted to GFL, and most importantly allowed us to maintain shareholder value by advancing our projects without the need for dilutive equity financing at depressed share prices. The terms are finalised at 49% ILC/ 51% GFL on Blackstairs project in and 20% ILC / 80% GFL on Mariana project in Argentina for International Lithium and Ganfeng Lithium respectively:
"These projects' structures allow ILC to move forward developing Blackstairs and Mariana projects without diluting our shareholders at the very depressed price levels today. We are losing part of the project in the J/V format in exchange for the capital investment, but this is the main proper way to finance Junior Mining operations. You are getting the smaller piece of the project, which has received extensive due diligence from much stronger partner and capital for its development. In case of ILC the technology involved from Ganfeng Lithium is even more crucial than the capital."
International Lithium visiting Ganfeng Lithium R&D facilities.
In addition to securing the Capital to advance the exploration on the properties we have also aligned International Lithium with a company that has the capabilities and technologies to extract and process Lithium into a final user-friendly product - High Purity Battery Grade Lithium which is currently in high demand. In the long run It will potentially save us significant additional processing costs and external consulting fees.
What is next for International Lithium? International Lithium and Ganfeng Lithium are now in the budget approval process for the Blackstairs exploration program. Furthermore, we are finalising our Joint Venture Agreement on the Mariana property after which we will begin the planning process for a follow-up exploration program later in the season. Now we are also working on the strategic structure to advance our Mavis Lake Lithium Tantalum project in Canada.
Stay tuned or give us a call to chat about ILC and our projects.
Disclosure: I am long ILHMF, TRRXF.