Western Lithium Raises Funds for Hectorite Plant

Western Lithium USA Corp of Reno, NV has entered into a Royalty Purchase Agreement with RK Mine Finance (Master) Fund II LP (Red Kite) pursuant to which Red Kite has agreed to pay Western Lithium up to US$20 million in consideration for the sale of a royalty on its Kings Valley project in Nevada. An initial tranche of US$11 million was paid on February 6 with the closing of the royalty arrangement. A second tranche of US$9 million will be funded upon completion of the engineering and design of the lithium demonstration plant and once certain regulatory assurances have been received from the Bureau of Land Management with respect to the sale of by-products associated with lithium production. Western Lithium plans to use the initial amount to construct a 10,000 tons/year facility to produce hectorite-based organoclay used by the oil & gas drilling industry. Engineering designs for a plant and negotiations for potential production locations are underway. Permitting of the hectorite mine has commenced and the company plans to begin production in early 2014. The second tranche of funding is principally allocated towards the construction of a demonstration plant to test the viability of its lithium extraction process at a large scale. Nemaska Lithium Inc of Quebec City, QC has announced that it is proceeding with the construction of its phase 1 lithium hydroxide and carbonate plant in Valleyfield, QC. Lithium hydroxide production is scheduled to begin in January 2014. Initially, the plant will use spodumene concentrate and lithium sulfate purchased on the open market. Longer-term, the company plans to use feedstock from its Whabouchi project in the James Bay region of Quebec that is currently in the permitting process. Guy Bourassa, Nemaska’s CEO, said, “ In addition to fulfilling our first off-take agreement and securing future sales contracts, we will benefit from the experience of running and operating our plant on a smaller scale, gaining invaluable know-how as we construct and design the larger commercial facility. We intend to secure enough feed for two years of production while we advance the Whabouchi mine through construction. In addition to processing spodumene concentrate, the phase 1 plant will also be used to recover lithium from by-product lithium sulfate sourced from industrial rejects. This could represent another revenue stream from the licensing of our technology to industrial customers.”

Volume 27 issue 3

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