Cadence expects its investments to form part of medium-term lithium supply

JOHANNESBURG (miningweekly.com) – UK-based mining investment firm Cadence Minerals chairperson Andrew Suckling is upbeat about the company’s exposure to the lithium market and expects the assets that it has invested in to form part of the medium-term lithium supply.

In its financial year-end report to December 2016, published on Wednesday, Suckling said that Cadence’s primary assets in Mexico and the Czech Republic were likely to become important sources of battery-grade lithium carbonate from 2019 onwards.

“Our two main investments and joint ventures (JVs) are targeting to produce, in aggregate, some 55 000 t of battery-grade lithium carbonate, which, based on analysts' projections, could represent a very significant 7% to 10% of the world's supply in 2025.”

Cadence is invested in the Sonora lithium project, in Mexico, directly and indirectly through its 16% shareholding of Canadian- and London-listed Bacanora Minerals and through its JV with the explorer. The bankable feasibility study is currently under way for the project and is set to be published in the third quarter. Should project financing be secured, construction could start in the first half of next year, with an 18-month build up. A March 2016 prefeasibility study (PFS) estimated that Sonora could deliver 17 500 t/y of battery-grade lithium carbonate for the first two years, increasing to 35 000 t/y after an expansion.

Cadence’s second big lithium focus is through its 20% investment in European Metals Holdings, which is developing the Cinovec lithium project, in Czech Republic. A PFS, published in April, indicates that the project is a low-cost and potentially significant producer of battery-grade lithium carbonate.

Suckling reported that the progress made at these assets, along with Cadence’s investment in Macarthur Minerals and Auroch Minerals, in Australia, had delivered absolute returns of more than 104%.

During the year, the company’s listed investments delivered an operating profit of £2.8-million, compared with £0.2-million in 2015.

He added that Cadence, which invested £7.85-million in the 2016 financial year would focus on three areas in 2017: Supporting existing projects to production; identifying new investments in lithium exploration assets and evaluating potential investments in other key metals that are used in the energy storing sector, such as cobalt, copper and nickel.