Piedmont North American Lithium Mine To Restart In First Quarter Of 2023

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Piedmonts North American Lithium Mine To Restart In First Quarter Of 2023

  • Upgrade and restart budget is C$98 million (A$110 million)
  • Piedmont has a 25 percent equity interest in the lithium mine owner, Sayona Quebec Inc.
  • Sayona Mining Limited (ASX: SYA) owns remaining 75 percent of Sayona Quebec Inc.
  • Sayona Mining and Piedmont considering joint downstream lithium processing operations in Quebec
  • Growing demand for lithium to create upside value for Piedmont shareholders over the medium term.

Piedmont Lithium Inc. (Piedmont or the Company) is developing a world class multi-asset integrated lithium business in North America. The Company is based in the Carolina Tin Spodumene Belt of North Carolina, considered to be the cradle of the lithium industry.  Piedmont is one of the world’s lowest cost producers of lithium hydroxide, an essential component of the US electric vehicle supply chain. Its operations are in close geographic proximity to its resources, production operations and prospective customers, enabling the Company to play a pivotal role in America’s move to the electrification of transportation and energy storage.

North American Lithium mine restart

Piedmont has confirmed the restart of spodumene (lithium) concentrate production at its North American Lithium (NAL) operation, located in Quebec. Spodumene concentrate is a key battery metal essential in the global clean energy economy. Production is scheduled to commence in the first quarter of 2023, making it the first North American local supplier of lithium concentrates.

The NAL operation is owned by Sayona Quebec Inc. (SYQ), which is 25 percent owned by Piedmont. The other 75 percent of SYQ is owned by Sayona Mining Limited (ASX: SYA).

The proposed upgrade and restart budget is approximately C$98 million (A$110 million) and critical long lead equipment has been ordered and most regulatory approvals received. This budget is entirely cash-funded by both Sayona Mining Inc. and Piedmont. Both companies undertook significant capital raisings in the first half of 2022 to fund their respective shares of the mine upgrade.

Sayona Mining and Piedmont have agreed the terms of an offtake agreement. Under the offtake agreement, Piedmont is entitled to purchase the greater of 113,000 metric tons per year of spodumene concentrate or 50 percent of production from the NAL project.  Purchases are subject to market pricing with a floor price of $500 per metric ton and a price ceiling of $900 per metric ton.

Looking Ahead

Sayona Mining and Piedmont are evaluating options for downstream processing in Quebec to capture upside value in the rapidly growing EV and battery storage sectors. Sayona Mining and Piedmont plan to commence technical studies for lithium chemical production in Quebec. Given Québec’s abundant mineral resources, low-cost hydroelectricity, and supportive provincial government, it is an ideal location for future lithium hydroxide production.

Growing demand for local and sustainable sources of lithium as a key battery metal is supportive of a viable downstream processing capability comprising lithium carbonate and lithium hydroxide production. Piedmont’s involvement in this steadily expanding integrated North American lithium business has the potential to create measurable value to shareholders over the medium term.

Louis Mosmann

Louis Mosmann is a Private Wealth Client and Research Assistant at KOSEC- Kodari Securities. Louis covers macroeconomic events, global markets and ASX300 company announcements, allowing clients to make more informed investment decisions. Email Louis at l.mosmann@kosec.com.au.

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