During the March quarter, XTC Lithium Ltd took steps to reposition itself as a focused lithium explorer in Argentina, concentrating on its flagship Carachi Lithium Project while exiting non-core assets in Western Australia and South Korea.
Over the course of the three months, exploration expenditure amounted to A$87,000, which was focused mainly on preparatory work at Carachi.
Productive quarter
The consolidation efforts follow a productive quarter in which the company signed a Letter of Intent (LOI) with US-based American Battery Materials Inc (ABM) and finalised a considerable divestment of Australian tenements.
The LOI sets out indicative terms for a proposed strategic partnership with ABM, offering the US company a pathway to acquire up to 50% of the Carachi Lithium Project in Argentina’s Catamarca Province.
ABM may earn an initial 10% interest through a US$3.5 million payment due within three months of execution, with funds earmarked for working capital and the commencement of a drilling program.
A further 40% interest could be secured over 30 months via a value-linked model incorporating market metrics including lithium carbonate spot prices, XTC’s market capitalisation, and resource grade and scale.
Renowned lithium triangle
The Carachi Project, covering 21,900 hectares in the renowned Lithium Triangle, is adjacent to advanced developments by global players such as Lake Resources and Allkem, and in proximity to the POSCO and Livent operations in the Hombre Muerto Salar.
XTC has retained full ownership of the tenements via its subsidiary XTC Lithium Argentina SAR.
To concentrate its efforts, XTC sold its Southern Cross exploration package in Western Australia to a private buyer for A$1 million, with A$500,000 of that amount still due by 30 June 2025.
Additionally, the company relinquished its 22.5% interest in a suite of South Korean tenements, consistent with its strategy to rationalise assets and prioritise its South American operations.
Corporate costs amounted to A$1.13 million, while the company also reported A$301,000 in payments to related parties.
Despite a modest cash balance of A$32,000 at quarter-end, XTC maintains access to a A$3 million unsecured loan facility, of which A$1.35 million remained undrawn.
The company is also expecting A$750,000 in outstanding proceeds from the Southern Cross sale, anticipated in the June quarter.
Discussions to raise capital
Company management says it is in advanced discussions to raise further capital and remains confident in securing sufficient funds to meet near-term operational needs.
Board changes were also implemented during the quarter, with the resignation of non-executive directors Carlos and Carolina Arecco.
The company continues to progress towards reinstatement to ASX trading following a period of suspension.
With the proposed joint venture at Carachi and a simplified asset base, XTC enters the June quarter with a view to unlocking value from its stake in one of the world’s most prospective lithium districts.