Global Lithium Resources (ASX: GL1) has entered into a 10-year spodumene offtake agreement with Suzhou TA&A Ultra Clear Technology.
Agreement will only come into effect after Board approval within 60 days
Under the 10-year agreement, Suzhou TA&A will buy no less than 30% of available product from Global Lithium operations
There will be an option to increase the quantity of product up to an additional 15% in each contract year
Either party may terminate the agreement if the following has not been achieved by 31 December 2024:
Completion of construction and commissioning of a concentrates plant
Completion of internal product qualification to meet agreed product specifications
Suzhou TA&A has a 9.4% stake in Global Lithium, meaning that it is within their best interests to support the emerging player.
Suzhou TA&A is a technology and market leader in cleaning products including personal protective equipment and safety syringes. The company is listed on China’s Shenzhen Stock Exchange with a market cap of around A$10bn.
More recently, the company [Suzhou TA&A] entered into a joint venture with Chinese battery giant CATL for a lithium carbonate smelting project worth 1 billion yuan (A$220m).
Suzhou TA&A has expressed its intention to provide ongoing financial support and construction funding as Global Lithium progresses its exploration projects to the next stage of development.
This could be viewed as a de-risking factor for when Global Lithium has to make a final investment decision and search for ways to finance the lithium project(s).
Global Lithium operates two relatively early-stage lithium projects in WA.
The company has a substantial exploration and drilling program planned for 2022.
Despite being in its early days, the company said that preliminary metallurgical test work indicates the potential to produce a high grade, low impurity spodumene concentrate using heavy liquid separation.
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