An Operational Update from Rock Tech Lithium
Dear Shareholders & Friends,
In the context of the ongoing market turmoil, I would like to give a short update on our progress made in the past weeks. An important message is:
There is no direct impact from Coronavirus on our business!
In early March, we attended the Prospectors and Developers Association of Canada’s (PDAC) annual mineral exploration and mining convention in Toronto. It was a very productive week and we had many meetings with our service providers and other stakeholders. All our partner firms, including TBT Engineering and Northern Bioscience, are working on schedule on the important milestones at our Georgia Lake property! However, there is no doubt that the Coronavirus has an impact on the stability of supply chains. An article appearing in the Financial Times last week carried the headline: “Coronavirus puts electric carmakers on alert over lithium supplies.” Lithium chemicals production in China is delayed and the transportation of battery cells on large container ships is as well. Investments in the resources sector are temporarily slowing down; however, the prices of lithium products are starting to rise due to the upcoming significant supply shortages, enhanced by demand catch-up effects. Another consequence is that battery metals supply chains will become more regional and shockproof, a trend that was already underway owing to increased trade tensions. This offers big opportunities in Europe and North America, opportunities for Rock Tech – i.e. General Motors already announced the intention to source the battery metals for its electric cars in North America. With our Georgia Lake project, we are centrally located at the Great Lakes, in easy reach to Detroit. As a reflection of this, I expect equity valuations of quality lithium and battery metals producers and developers to follow the positive lithium price trend soon.
First of all: we keep our costs under strict control! This is of course an important task in times of challenging markets! Nevertheless, as a next step in our permitting process, we will soon formally submit our “Project Description” to the local regulatory agencies. The map below summarizes our plans and shows the setup of our proposed mine site with production pits, plants, access roads, tailings facilities and other infrastructure:
In addition to the progress made on permitting, we are working with German and Australian engineering firms with broad lithium expertise to create our processing plant design and flowsheets. With these engineering plans, we can intensify our ongoing discussions with investors and with regulatory agencies around funding and subsidies for the plant construction. These talks are primarily with German and Canadian stakeholders. We aim to be ready for funding when the markets turn around and investor confidence increases again.
In parallel, we started new negotiations on co-operations to increase our access to lithium ore feedstock – i.e. with our partner Ardiden (photo at Ardiden Booth at PDAC/Toronto).