Galaxy veteran returns to the lithium fold with new IPO

A new lithium venture from local industry pioneer Iggy Tan, Lithium Galaxy, is planning a $4.5 million IPO. This should see the listed gaming company shell Mogul Games Group (ASX: MGG) transformed into a lithium exploration and development company.

Tan takes up the role of non-executive director at Lithium Galaxy and remains managing director of Altech Batteries (ASX: ATC).

The new venture, subject to shareholder approval, will own the promising Apollo Lithium Project in James Bay, Canada. Located in northern Quebec, this project has an estimated resource of 40.3Mt at 1.4% Li²O and an Ore Reserve of 37.2Mt at 1.3% Li²O.

“While there are many lithium explorers in the world today, only a handful have the necessary expertise and ability to effectively develop and construct viable lithium projects,” said Tan.

“The new company will have a rich pedigree of lithium experience to establish a spodumene-producing mine in Quebec, Canada, as quickly as possible.”

Tan was one of the first Australian mining executives to identify the opportunity presented by the emerging lithium-ion battery sector. He spearheaded lithium producer Galaxy Resources Limited 20 years ago – which in 2021 merged with competitor Orocobre Resources to form Allkem (ASX: AKE).

Some of the numerous highlights of Tan’s career to date include:

• Building the Mt Cattlin Spodumene Mine (137,000 tonnes per annum)

• Downstream Jiangsu Lithium Carbonate Project (17,000 tpa)

• Acquired James Bay Spodumene Project, Canada and Sal de Vida Brine Project, Argentina for Galaxy. 

The Jiangsu Lithium Carbonate plant was sold to Tianqi Lithium Corp for US$260 million in 2014, and the north portion of the Sal de Vida project was sold to POSCO for US$280 million in 2018.

Under Tan’s stewardship, Galaxy’s market cap topped $2.5 billion in 2021, ahead of the Orocobre merger which formed Allkem – from less than $10 million when he joined the company. The Allkem company recently merged with Livent in a monumental $15.7 deal to become a dominant force in global lithium.

Why is Iggy back?

After a 10-year hiatus from the lithium industry, Tan cites the “immense potential” of the Apollo Lithium Project as a key reason for his return.

From his earlier-mentioned acquisition of the James Bay Spodumene Project in 2012, Tan is intimately familiar with the project. He has emphasised the need for the company to prioritise the “swift development of profitable lithium projects, instead of solely concentrating on exploration.”

Tan has also emphasised the significant challenge of prolonged project development timelines for the lithium industry. The process can take up to eight years, from initial resource discovery to the completion of feasibility studies, construction, and eventual product launch.

Tan’s track record of accelerating lithium production includes Mt Cattlin, where his team went from maiden resource through to funding, construction and first production in a record three years.

In his new role, Tan emphasises the strategic positioning of the Apollo Lithium Project, which is located between two noteworthy lithium discoveries: Patriot Battery Metals' Corvette Lithium Project (located 29km to the northwest) and Winsome Resources' Adina Lithium Project (located 28km to the east).

Both of these companies have achieved significant spodumene discoveries, reflected in their impressive market capitalisations,” he said, noting Patriot's value now exceeds A$1.4 billion, while Winsome stands at over A$300 million.

Tan also emphasised the Apollo Lithium Project shares the same greenstone belt as these neighbouring projects.

He anticipates the new company’s market cap upon relisting will be a “relatively modest” figure of around $12 million – despite the favourable context.

Other industry figures have welcomed Tan’s return to the lithium fold, including global lithium industry expert and commentator Joe Lowry:

I am very happy to see Iggy Tan back in the world of lithium. For the industry to get to the next level required to support the energy transition, we need the kind of creativity he brings. The industry will benefit from his innovative thinking. His big personality will keep things interesting.