Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) has drawn down approximately A$800,000 from the A$4.5 million convertible note issued by Mineral Resources Ltd (MinRes) – the second drawdown under the companies’ joint development arrangement and a strategic move to bolster LIT's financial position for the upcoming fiscal quarter.
The new funds are earmarked for operations tied to the ongoing joint development agreement which aims to deliver positive results from piloting activities this year.
Once the pilot plant operations and engineering study have been completed, the MinRes convertible note will convert into equity in a new 50:50 joint venture which will wholly own the LieNA® technology going forward.
The JV plans to license the LieNA® technology to third parties at a target headline gross product royalty rate of 8%.
Carnac appointed lead engineer
Adding to the momentum, Lithium Australia has announced the appointment of Carnac as the lead engineer for the demonstration plant engineering study. This decision follows a rigorous formal tendering process.
The selection of Carnac, a reputed engineering firm, underscores Lithium Australia's dedication to excellence and precision in its developmental pursuits.
The planned operations are a continuation of the progress achieved in Q2 FY24, where Lithium Australia utilised the initial funds from the first drawdown which were instrumental in assessing the spodumene samples provided by MinRes and laying a solid foundation for future developmental activities.
Looking ahead, Lithium Australia is poised to make significant strides in its joint development agreement with MinRes. The company eagerly anticipates delivering promising results from its piloting activities in 2024, a move that could potentially bolster its position in the lithium market and contribute to the broader sector's growth.
This development not only signifies Lithium Australia's robust financial planning but also its strategic foresight in navigating the dynamic landscape of the lithium industry.
“We are excited by the progress we have made so far with our partner MinRes. The second drawdown from the convertible note follows from a successful Q2 FY24 and highlights our aligned ambition to continue developing the LieNA® technology,” Lithium Australia CEO and managing director Simon Linge said.
“The appointment of Carnac and delivery of the engineering study will facilitate the development of the demonstration plant following the formation of a JV. We look forward to continuing our partnership and are on track to deliver positive results from the pilot plant during 2024.”