LA Private

Hard rock lithium in WA

Ron Mitchell, Managing Director of Global Lithium Resources Limited (ASX:GL1), which owns two of the 14 lithium projects in Australia, discusses the price of lithium, and progress on the company’s projects.

Tim McGowen: We’re talking today with Global Lithium Resources (ASX:GL1). It’s got a market cap of around $340m. We’re joined by Managing Director Ron Mitchell. Ron, welcome to Sydney. Thanks for your time.

Ron Mitchell: Great. Pleasure to be here, Tim. Thanks for having me.

Tim McGowen: Now, people and potentially new shareholders and investors who don’t understand the Global Lithium Resources story, can you give us some background?

Ron Mitchell: Yeah, look, we’re a young company. We just had our two-year anniversary actually last weekend. So, we only listed on the ASX in May of 2021. Came to market with a single asset up in the Marble Bar region, 10 million tonne resource. Following our listing, we were the best-performing IPO on the ASX back in 2021. So, we had a fantastic first year.

Last year was an incredibly busy year for the company on multiple fronts. We acquired our second asset, the Manna Lithium Project, out east of Kalgoorlie, and completed a 100 per cent acquisition of that initial joint venture the back end of last year. And that culminated also on a very significant update to our total mineral resource across both projects. We moved that position up to 50 million tonnes at 1 per cent. So, yeah, really, really thrilled. Lots to do.

We’re in a DFS at the moment for our Manna project. So, a lot of sort of technical derisking workstreams underway at the moment.

Tim McGowen: And off-camera you said you’ve been in the industry 13 years, which is a long time in this lithium space. It would be remiss of me not to ask about lithium pricing. Morgan Stanley have come out recently saying it seems to have bottomed. What’s your views?

Ron Mitchell: I’ve seen just about every high and low in the sector over the last 13 years. And this is certainly where we’re getting multiple indications that we’re sort of at the bottom and back on the way up. And it has been my firm view for several months actually that the tide is turning. Absolutely. The demand piece coming out of China’s really robust. We actually have a team on the ground in China at the moment on a technical visit, but certainly a good understanding of what’s happening on the ground in China. And that’s always been the precursor for the global lithium pricing.

But prices are holding up, particularly for spodumene. There’s various lithium products being traded at different price points, but, you know, Western Australian spodumene is in incredibly high demand. It’s the preferred raw material in the electric vehicle sector. And our producers and our next wave of developers are in a really strong position going forward.

Tim McGowen: And you touched on your DFS for your Manna lithium project. How far has that DFS progressed to date and what are the kind of key aims the company plans to achieve from this study?

Ron Mitchell: Yeah, so, a key part of that is working with the best. So, we’re engaged with Wave International, a lithium consultancy that has close to 100 years of experience across their metallurgy and process engineering employees. So, we’re got a real A-grade team working together with our own team, led by Dr Tony Chamberlain, a really experienced individual who’s just come out of BCI Minerals as well. So, Tony’s leading our development team. We’ve got some fantastic onboarded metallurgical and mine engineering capability on our side. And we’re also… the met program’s actually with Nagrom, which, as far as spodumene goes, these guys are the best in the business. I think on a global basis, as it relates to spodumene metallurgy, they’re peerless.

So, the DFS officially got underway in January, so we’re making fantastic progress. There’s a lot to do, and part of that is really having significant amount of core that we can undertake a number of sort of de-risking workstreams. Part of that is things like ore sorting. We think ore sorting is going to add tremendous value to our DFS and ultimately help to de-risk the flowsheet.

So, spodumene beneficiation is proven. That’s the beauty about what we’re doing. Our plant will constitute a fifth or sixth-generation spodumene beneficiation plant here in Western Australia. And we’ve got this incredible ecosystem of expertise, as I refer to it, that’s going to help to deliver this project. So, yeah, on track.

Tim McGowen: And what makes Manna such a standout lithium project?

Ron Mitchell: Oh, look, multiple fronts. Like any project having the fundamentals around the actual resource itself. We’ve got shallow mineralisation, stacked pegmatites, near-surface outcropping. Spodumene-bearing pegmatites, so not only are our pegmatites lithium-bearing, they’re spodumene -bearing, the best type of lithium raw material, as I mentioned earlier.

The pegmatites also are in quite a close proximity to each other, being stacked and open in multiple directions and at depth. So, this is the beauty of our resource. Whilst we’ve got a 32.7 million initial resource, we think that will grow tremendously on the back of a really significant additional exploration campaign this year. We’ve got another 50,000m planned. We’ve got some incredible targets on the back of some geophysical, geochemical surveys, airborne and land-based surveys we did in the first quarter. So, it’ll be world-class, not in terms of scale, but the chemistry as well. It’s very consistent in terms of its grade throughout the deposit, and certainly amenable to an open-pit mining operation, which we’re really good at here in Western Australia.

Tim McGowen: And you had a maiden resource upgrade late last year, I believe, and you’ve got kind of significant exploration upside for both Manna and Marble Bar. So, what sort of exploration program is playing out through the rest of the year?

Ron Mitchell: Yeah, actually we announced to market last week the kick-off of that campaign. It’s a 70,000m campaign across both project sites. So, 50,000m, a combination of reverse circulation and diamond drilling at our Manna project, and then another 20,000m at Marble Bar. So, as I mentioned, we’ve got some very specific targets that’ll be subject to that exploration and drill out campaign this year.

We’ve got a combination of near-surface mineralisation, but some really high grades and quite wide intercepts at depth as well. So, we need to drill those out and test them further just to find the full extent of the resource.

But our geo team’s very, very excited to soon be back out on country, drilling and exploring. And the fact that we have two resources, two of only 14 lithium resources in Australia, puts us in a wonderful position and gives us that really important development optionality as well as we move forward.

Tim McGowen: And in terms of establishing downstream credentials to strengthen what the business can offer through the kind of lithium value chain, who are you looking to partner with in that regard?

Ron Mitchell: Yeah, we’re spoiled for choice, Tim. There’s been phenomenal interest in the project in the company ever since I joined early last year, and from multiple jurisdictions. You know, of course, China’s still a very important part of this industry. We do have one partner there that’s on our register. But the interest from Japan, Korea, Europe and North America is really compelling.

So, we’re taking our time. We’ve been really prudent and very conservative in our approach to partnership on the downstream side. But what I can say is we’re dealing with some very well-credentialled, sophisticated, and well-capitalised sort of tier-one counterparties. So, when we do announce a deal, it’ll be a very good one for our shareholders.

Tim McGowen: And you touched on those cornerstone investors. Who are they and what sort of synergies do they potentially bring to the business?

Ron Mitchell: Yeah, we’ve got a couple of strategics on our register. One is Canmax, formerly known as Suzhou TA&A, and they’re controlling shareholder of a company called Yibin Tianyi Li. And this company in China has unparalleled lithium expertise and they currently manage around 110,000 tonnes of lithium hydroxide conversion. And, as you know, spodumene is the preferred raw material to produce lithium hydroxide. Been a wonderful partner and very supportive of what we’re doing. Part of our technical visit is obviously to meet that team in China this week.

And the other partner we have, of course, is Mineral Resources (ASX:MIN). And, again, a company that has some incredible expertise on the upstream side. And, yes, certainly we’re conversing with both of our shareholders and we’ll look to bring in their expertise and work with them where there’s some synergies going forward.

Tim McGowen: Ron Mitchell, thanks for your time.

Ron Mitchell: Thank you.