THE BOURSE WHISPERER: Cobre Montana (ASX: CXB) has struck new processing licence agreements it considers to have potential to cement Western Australia as a long-term major supplier of lithium into expanding global markets.
The agreements will combine Cobre’s mica-based lithium occurrences near Coolgardie, Ravensthorpe and Southern Cross in WA, with a proprietary technology developed and owned by Perth-based technology provider, Strategic Metallurgy.
Cobre claims this is the only known practical processing technology able to extract lithium from the sheet like mica.
Mica is an electrical and thermal insulator, which has recently enhanced its status as a key potential source of lithium for new-age heavy duty lithium and lithium-ion batteries for transport – including aviation purposes – and applications such as heat-resistant glass and ceramics, and high strength-to-weight alloys.
Western Australia already supplies around a third of total annual global lithium production.
The agreements, in the form of options over the use by Cobre Montana of the Strategic technology, will run for up to 26 years and are exclusive to Cobre in WA as well as two other Cobre lithium project areas of the company’s choosing in either Australia or overseas.
“The licencing deal follows our recent success in delivering proof-of-concept lithium carbonate production from micas, using the Strategic Metallurgy technology,” Cobre Montana managing director Adrian Griffin said in the company’s announcement to the Australian Securities Exchange.
“We were able during this proof-of-concept phase to produce battery-grade lithium carbonate suitable as a feed stock for these emergent high-tech batteries, from our lithium mica (lepidolite) deposits in WA.
“Lepidolite until now, has had very limited application in the production of lithium chemicals but we have achieved that breakthrough and have now backed it up with a long-term licence to process agreement that will position Cobre Montana as a potential future lithium supplier into these expanding and global high technology markets.”
Under the agreements, the licences will provide Cobre exclusivity within Western Australia for up to 25 years and exclusivity at two other locations anywhere in the world.
“The exclusive nature of the licences provides Cobre with an unprecedented advantage over competitors by providing, through Cobre, the only practical means of accessing the technology so that Cobre will be the key to implementing lithium projects based on mica plant feed,” Griffin said.
Under the terms, Cobre Montana will have:
Option will be free for 6 months;
Two subsequent option extensions of 6 months by payment of $5,000;
Option exercise $100,000;
A requirement to continue testing with Strategic Metallurgy;
Gross product royalty 2 per cent;
Licence exclusivity extending 5 years from exercise;
Exclusivity extended another 20 years if a plant is commissioned in WA during the initial 5 year exclusivity period; and
Two further licence options available anywhere in the world, with Cobre having the right to change nominations by agreement with Strategic.
“We have been exceptionally pleased with the test results using this technology and the option provides us with the ability to lock in our position, with no additional outlay as further testing progresses,” Griffin said.
“Furthermore, the arrangement effectively gives Cobre Montana exclusive first rights to utilise the technology anywhere in the world and potentially have front running in WA for over 25 years.”