Lithium

Global Lithium's largest shareholder signs 10 year spodumene offtake agreement

Thu 03 Mar 22, 12:10pm (AEST)
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Key Points

  • Global Lithium enters into a 10-year offtake agreement with Suzhou TA&A
  • The agreement is still subject to board approval and operational milestones

Global Lithium Resources (ASX: GL1) has entered into a 10-year spodumene offtake agreement with Suzhou TA&A Ultra Clear Technology. 

Offtake highlights

  • 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

A vested interest

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).

Next steps

Global Lithium operates two relatively early-stage lithium projects in WA.

The company has a substantial exploration and drilling program planned for 2022.

Global Lithium Company Presentation Timeline
Source: Global Lithium RIU Explorers Conference Presentation

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.

Global Lithium Price Chart
Global Lithium 12-month price chart

 

Written By

Kerry Sun

Finance Writer & Social Media

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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