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Rare Earth Minerals hopes Tesla agreement is first of many deals

Published: 08:36 21 Sep 2015 BST

Tesla,_electric_car,_battery,_Lithium_55ffb3e21c5c2
The supply agreement with Tesla was struck last month..

Rare Earth Minerals (LON:REM) hopes its supply deal with high-profile electric car group Tesla will be the first of  several off-take agreements for its lithium.

In late August, the firm, in conjunction with joint venture partner Bacanora Minerals (LON:BCN), signed up battery maker Tesla as a potential customer for lithium mined from the Sonora project in Mexico.

"We are currently advancing additional potential off-take agreements with whom we have non-disclosure agreements with and we look forward to updating the market as we progress of these discussions," REM said today, posting its latest half year results -  a busy period.

"The lithium market is approaching an important inflection point, with strong lithium battery growth fundamentals driving strong demand. 

"With limited supply capacity from the traditional producers, REM sees that it will be the new producers that will be asked to fill the widening supply gap.

"The progress on our key assets and investments over the last six months has been very strong and we look forward to reporting on the continued developments from these projects."

That performance of its portfolio of assets and investments created £2.65mln in comprehensive income for the six months to June 30 compared to £255,000 in the same period last year.

Total assets increased to £21.79 million from £15.63 million at the end of 2014, of which £12.74mln is the market value of the group's investments at period end.

The loss before tax was £1.2mln compared to a loss of £191,000 in the same period in 2014.

Among the highlights of the six months at Sonora, was the firm increasing its holding in Bacanora from 12.0% to 17.02%, while its economic interest in the Mexalit and Megalit licenses was lifted from 38.4% to 41.91%.

An updated mineral resource estimate for the project means its is 226% larger than previously reported at 7.42 million tonnes of LCE.

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