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Lithium Universe’s CEO Alex Hanly on North America’s Lithium revolution

Paul Sanger: Hi, I’m Paul Sanger for the Finance News Network, and today we’re talking to Lithium Universe. Lithium Universe has the ASX code LU7, and a market cap of around 20 million. The company’s main objective is to establish itself as a prominent lithium project builder by Prioritizing Swift and successful development of lithium projects. Instead of exploring for the sake of exploration, the company’s mission is to quickly obtain results and construct a spodumene producing mine in Quebec Canada. We have with us Lithium Universe, CEO, Alex Hanley. Alex, welcome back to the Network.

Alex Hanly: Hey Paul, thanks for having me, mate.

Paul Sanger: Alex, it’s been a dynamic start to 2024 for Lithium Universe. The company has been actively addressing the lithium conversion gap, and we’ve been implementing strategies to narrow it. Can you elaborate on this initiative?

Alex Hanly: Yeah, absolutely. Paul, not only a dynamic start to the year, but probably a dynamic start since August. It’s been pretty full on at the company. Obviously with Iggy Tan, he’s definitely a different beast, you could say, in this type of world. But no, definitely, the start of the year was very interesting for us. We obviously just released what we call the conversion gap strategy. And what this is in real simple terms, is a very simple supply and demand thesis in North America. As we all know, Australia is the, I suppose, main supplier of Hard Rock spodumene over the last decade. And what we’ve seen in the last three to four years, is discoveries and new operations coming online within the Atlantic corridor. So that’s including South Africa, West Africa, Brazil, and more importantly for us in a tier one jurisdiction in James Bay and Quebec. Now, what we sort of ticket or estimate in James Bay is about 500 million tons plus 1% globally across about eight different projects within the region.

Now, currently, there’s a very strong supply side at Atlantic Corridor. And then from the demand perspective, what we see is about 25 to 30 new gigafactories or cathode facilities coming online by 2028. This equates to about 850,000 ton per annum of lithium chemicals required. Now, currently in North America, there’s no converters for hard rock spodumene, right? Anything that’s actually mined in North America or the Atlantic corridor, is having to make its way all the way to China to be converted, before coming back and getting fed into the gigafactories and cathode facilities. So what we’re doing is we’re building a converter in North America to onshore that supply chain within the North American ecosystem.

Paul Sanger: And so what are the latest findings from the test program regarding the lithium carbonate refinery?

Alex Hanly: Yeah, we’ve set up a lab to test our process flow sheet. It’s obviously a flow sheet that we’re very familiar with. It’s based on the Jiangsu design, which Iggy Tan, Jingwan Lu, and John Loxon delivered for Galaxy back in the day. Well, I suppose first a bit of background, what we did, we grabbed four different samples from across the world. Two in Australia, one in Brazil, and then one also in Canada. Now what we looked for, was some of the most impurity rich spodumene. So we wanted to validate our flow sheet against this type of spodumene, so we could display to the market that we can process anything from around the world with any type of impurity profile. And what we found within our first test, is that we achieved on first pass, would you believe it, 99.7% lithium carbonate. So above the battery-grade component of 99.5. So the first test result, Paul, was a success, and we’ve got three others currently under test.

Paul Sanger: Wow, really impressive. And you also recently secured some Quebec-prime industrial land for your proposed lithium refinery. Can you provide some insights into the site’s location and its potential operational capabilities?

Alex Hanly: Yeah, that’s right. We had earmarked Bécancour, equispace between Montreal and Quebec City, about late last year. So we were working over Christmas with the industrial park to sign an option that was executed earlier this year. And why we’ve chosen this ground in particular, Paul, is that we’ve obviously got direct use to hydroelectricity, so very cost-effective green energy. We’re also right on the highway, we’ve got rail access. But most importantly for us is that we have port infrastructure about two kilometers from our block. So we have the ability to bring in Spodumene bulk via the St. Lawrence from the Atlantic region. So we’re positioning ourselves so we’re not just, I suppose, just getting one demand from James Bay, but also bringing the Spodumene via boat via the St. Lawrence. So this puts us in a great position. The industrial park itself, we’re just across the road from GM Postco, the cathode facility, as well as the Ford SK Pro and Nemaska Lithium as well. So it’s an existing industrial park, which is quite important.

Paul Sanger: While we’re on that topic, you also concluded a port study for the Spodumene import into the lithium carbon refineries you just mentioned. What were the king findings from this study?

Alex Hanly: Yeah, that’s right. We looked at probably four different ports along the St. Lawrence to bring in Spodumene into our Bécancour block. Obviously we looked at Montreal and Quebec City, as well as a different port along the river. But what we came to find pretty quickly, is that the Bécancour port, it’s slated for some improvements and expansion in the coming years. And obviously that’s going to be our best point of call in the future. So this was, I suppose, a very good litmus test to really validate not only the port choice, but also the choice in the industrial land at Bécancour.

Paul Sanger: You’ve certainly been busy. Now, you recently completed a capital raising. Can you talk a bit about how you’re going to plan to utilize the funds that you raised?

Alex Hanly: Yeah, that’s right, no, that raise was supported by not only existing investors, existing shareholders, but new investors from all across Asia Pacific and Europe. Now, what the use of funds for this tranche is really just looking to complete the definitive feasibility studies that we currently have on hand at the moment. So we’re currently looking at both the concentrator with Primero, so that’s this multi-purpose, standalone concentrator, and then obviously the refinery. And that’s the work that we’re currently doing with Hatch. So they’re the two main bodies of work at the moment that we’re progressing with those use of funds. And they’re slated for completion by the end of the year.

Paul Sanger: And looking ahead to the remainder of 2024, what upcoming developments can investors expect from Lithium Universe over the next six months?

Alex Hanly: Well, Paul, we’re very active, so we’re tapping both the networks in the Asian market as well as in the European market, to really understand what type of partners are out there that we can potentially do deals with. Whether that be OEMs, or going all the way upstream to the mine supply. So that’s really the next effort for the company, is lining up the feedstock and then the off-take agreements. So the company’s been hitting the ground boots on ground, both in Asia and Europe recently trying to talk to investors. Obviously there’s a very strong market for a lithium converter and a proven technology like what we have in North America. So it’s about understanding what those partnerships really look like at this stage.

Paul Sanger: Alex, been an absolute pleasure. Really appreciate the update. Clearly you’ve been incredibly busy, and we’ll watch very closely what happens over the next six months.

Alex Hanly: Very good. Thanks Paul.

Paul Sanger: Thank you.