AUSTRALIA’S Ricca Resources has signed a farm-in arrangement with UK-listed Firering Strategic Minerals worth $18.6m that will see it take stakes in lithium-tantalum prospects in Côte d’Ivoire.
Ricca will spend about $17m developing a definitive feasibility study for the Atex Project and the adjacent Alliance licence in return for 50% of Firering’s interests which total 77% and 51% in the projects respectively.
The balance of the consideration to Firering consists of $0.6m in Ricca shares and a $1m cash payment. Any additional funding required to take the projects to DFS level will be financed equally between the two companies, they said.
“The investment by Ricca will reduce our funding risk through studies and towards production,” said Yuval Cohen, CEO of Firering Strategic Minerals.
Shares in Firering were about 27% higher in London in mid-afternoon trade.
Lithium is used in the manufacture of batteries for electric vehicles, but the mineral’s supply has been the focus of attention for several years with commentators saying not enough resources of the mineral were in development.
“There’s a complete over-optimism about the responsiveness of supply in the lithium market,” said Andrew Miller, COO of Benchmark Mineral Intelligence earlier this year. “It’s very hard to see how it’s going to accelerate at the speed that the battery market and electric vehicles are accelerating.”
Difficulties in securing supply are even trickier to secure higher up the value chain. None other than Tesla owner Elon Musk commented recently, saying: “I’d like to once again urge entrepreneurs to enter the lithium refining business.
“The mining is relatively easy, the refining is much harder,” Musk was quoted by Bloomberg News as saying. “You can’t lose, it’s a license to print money.”