An Australian lithium exploration company working ground in northwestern Ontario is doing a direct deal with one of the world’s biggest battery manufacturers.
Green Technology Metals (GT1) announced LG Energy Solutions has signed an offtake sheet to receive 25 per cent of the spodumene concentrate production over a five-year period from the start of mining at its flagship Seymour Project, a 9.9-million tonne lithium deposit.
Seymour is situated at the top end of Lake Nipigon near the town of Armstrong. A preliminary economic assessment (PEA) of Seymour, as to what a mine could like, is underway and is expected to be made public in a few weeks.
The South Korean manufacturing giant is investing (Australian) $20 million – $17.9 million – by buying shares in Green Technology to become a 7.89 per cent shareholder in the junior mining company.
Green Tech said the funds will be used to continue all the technical and economic studies at Seymour to advance the project toward production.
LG Energy Solutions (LGES) is a spinoff of LG Chem, a leading global manufacturer of lithium-ion batteries for electric vehicles, mobility, IT and energy storage systems.
A Green Tech news release said this is a milestone agreement as it marks the first upstream transaction from LGES into securing lithium feedstock.
The offtake agreement will be finalized by August.
This investment builds on an earlier deal involving Green Tech with financial backing coming from Lithium Americas, a multi-national player with investments in Argentina and the U.S. Lithium Americas provided a US$10-million “strategic equity investment” that makes them a five per cent shareholder in Green Tech.
Green Tech has made it clear it wants to be the first lithium producer in Ontario. The company is eyeballing a possible lithium hydroxide plant in Thunder Bay.
A lithium hydroxide conversion facility is a refinery that takes lithium concentrate, processed at the mine site, and converts into a battery-grade material that the electric vehicle manufacturers are after.
Green Tech holds almost 41,000 hectares of ground containing lithium prospects throughout the northwest. After Seymour, it’s next up-and-coming project is Root, northeast of Sioux Lookout and close to the community of Slate Falls First Nation.
The company said it’s in discussions with a “variety of parties” about funding Seymour and the chemical plant.
Ontario has no lithium mines but northwestern Ontario is fast becoming an exploration hotbed for the high-tech metal, particularly by Australian companies.
“We welcome the execution of these important agreements with LGES and look forward to their contribution as a new strategic partner with GT1, along AMCI, Lithium Americas and Primero,” said Green Tech Chair John Young in a statement. “LGES brings global scale and expertise in battery manufacturing as well as balance sheet strength as GT1 advances its integrated lithium strategy in the Tier 1 jurisdiction of Ontario.”
“We have always been committed to expanding our supply chain in North America, as a steady supply of critical minerals, including lithium, is key to ensuring reliable and timely delivery of our innovative power solutions to our customers, “ said Myung Hwan Kim, LG’s chief procurement officer. “Thanks to partnerships with competent local suppliers like GT1, we will continue to devotion to expediting the EV transition in North America, through our product competitiveness and operational excellence.”