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Lithium Australia NL To Divest Graphite Projects

Lithium Australia NL (ASX:LIT) has committed to focusing on its prospective lithium projects after deciding to divest its five graphite projects.

Returns from the divestment are intended to be distributed directly to Lithium Australia shareholders.

The intended focus on lithium follows the recently announced Goldfields Lithium Alliance (GLiA) with Cazaly Resources Ltd (ASX:CAZ).

The GLiA is the third alliance Lithium Australia has formed in Western Australia and highlights the value of the company's unique lithium extraction technology, Sileach.

Adrian Griffin, managing director, commented:

"In the past two years, Lithium Australia has developed an extensive lithium portfolio to support our processing ambitions, but while we were doing so, we were cognisant of other raw material requirements for battery and associated clean energy technologies.

"Of the 'cleantech' raw materials, graphite in particular was in our sights as we built our lithium asset base and this dual focus enabled the company to identify and acquire a number of areas with high graphite potential.

"These areas are the subject of a number of exploration licence applications by LIT and have been accumulated in a stand-alone graphite portfolio.

"To maintain for the investing public, our higher priority lithium focus, we now intend to divest our interest in the graphite portfolio and return much, if not all of the value generated in doing so, to Lithium Australia shareholders."

Background

Lithium Australia is a lithium technology company with projects in Western Australia, Northern Territory and Mexico.

Sileachâ„¢ is a market leading metal extraction technology owned by Lithium Australia.

The Sileachâ„¢ process is designed to recover lithium from silicates without the expensive roasting step that has long been the main stay of the lithium recovery process.

In March, the company began to fast track pilot plant testing of the Coolgardie lithium deposit using the Sileachâ„¢ process.

The company has been developing a long-term strategy for the establishment of a lithium processing hub in Port Hedland, Western Australia.

Analysis

Lithium has been a large driver of Lithium Australia's 80% share price appreciation year to date, so it is positive to see the company committing to focusing on the commodity.

The company will now be solely focused on its large portfolio of lithium projects which can generate a steady flow of price sensitive news.

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