MinRes: Find a Partner to Develop Lithium Mine Business

Shares in mineral resources hit a six-week high yesterday as the company revealed it was looking for a handful of partners to fund lithium ore processing for the Wodinga project in the pilbara region of Western Australia.

A minority stake may be as high as 49, and Minres hopes to use the deal to expand its mining services business rather than a pure miner.

Some media reported that companies could raise around $1 billion by selling 49 cents.

Shares rose 2.4 cents to $18.44, the highest level since March 22. However, to date, this figure is still less than 12.

Prior to the release of the potential sales news, data released by Minres showed that Wodgina's resources increased by 20 billion tons to 233 million tons and its lithium oxide content was 1.21 tons. Its possible reserves in the Casserite pit were 142.4 billion tons and aluminum oxide content was 119. <UNK>.

"This reserve supports mine production for nearly 30 years, with an annual output of 5.65 million tons(Mtpa) and other exploration upside space. "Minres said yesterday.

Managing director Kelisiailisen said the sales process is consistent with the company's strategy of investing in early projects, adding significant value, and then seeking equity partners to share the value of the overall development plan.

"Wodgina is ideally positioned to become an important global producer of advanced lithium products with resources that can support 30 years of lithium operation," he said.

"The decision to launch a minority sale to Wodgina will allow MRL to focus on developing a core strategy to become the world's leading mining service provider, while allowing like-minded strategic partners to invest with us to fully unlock Wojina's lithium potential.

But Mr. Ellison made it clear that Minres would only introduce project partners if acceptable terms could be ensured. If not, he said, the company would have been able to fund and implement its downstream processing strategy on its own in Wodgina.

Minres stated that it had received expressions of interest from lithium processors, battery makers, international trading companies and car makers in obtaining off-take agreements and direct project investments in Wodgina, and that it had appointed Gilbert + Tobin, a Sydney lawyer, to help it evaluate competitive proposals.

Under the terms of any transaction, Minres will provide a full pit under the Mining Services Agreement to transplant the mining services to the joint venture.

Minres said yesterday that it had already shipped raw lithium ore to 10 customers and planned to produce 4 million tons of so-called direct transport ore in the current fiscal year, with an investment of 5.5 million tons planned for the next fiscal year.

The company said it plans to phase in a lithium pyroxene plant with an annual capacity of 750000 tonnes in October and December and March next year.

A pre-feasibility study is about to be completed. To integrate upstream and downstream operations and obtain additional value for the lithium supply chain, Wodgina can produce 50,000 to 100,000 tons of lithium carbonate or lithium hydroxide plants each year. The study is expected to be completed by mid-year, and construction is expected to begin later this year if it is approved by the board.

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