Bridging North America's lithium conversion gap

Bridging North America’s lithium conversion gap

Lithium Universe Limited (ASX:LU7) CEO Alex Hanly provides an update on the company, discussing collaboration with the W8banaki, listing on the Frankfurt stock exchange and the OTC Markets and outlook.

Peter Milios: I'm Peter Milios from the Finance News Network, and today I'm talking with Lithium Universe (ASX:LU7). Lithium Universe, trading under the ASX code "LU7" with a market capitalisation of approximately $11m, is dedicated to closing the lithium conversion gap in North America by developing a mine-to-battery-grade lithium carbonate strategy in Quebec in Canada. Joining me today is Lithium Universe CEO Mr Alex Hanly. Alex, welcome back to the network.

Alex Hanly: Hello, Peter. Thanks for having me.

Peter Milios: Alex, to start, can you explain how the company's planning to close the lithium conversion gap in North America?

Alex Hanly: The lithium conversion gap in North America is an evolving story. From a supply side, we're seeing huge resources come online within the transatlantic region. We've got obviously regions like Itinga, where obviously Latin Resources (ASX:LRS), Pilbara (ASX:PLS) obviously had that big M&A action late last week. We've also got, obviously, West Africa's Zimbabwe, South Africa. But from a Tier 1 jurisdiction, Canada, in particular James Bay, Quebec, is really sort of setting the scene as one of the biggest hard-rock spodumene jurisdictions, with about 500 million tonnes of >1 per cent across eight distinct projects.

Now, we see that spodumene resource, or that global spodumene resource in James Bay, doubling within the next four or five years, really cementing itself just as a 2IC to WA in terms of hard-rock spodumene. So, we've got a very huge supply side coming online within the next 5-10 years in James Bay. From a demand perspective, there's about 1,000 gigawatts that the Department of Energy have slated that are going to come aligned with downstream battery manufacturers, including the likes of CATL, LG, Ford. They're all looking at battery and cathode facilities in and around the east coast of North America.

So, huge supply, huge demand, but currently no lithium converters in North America, and there's only about 100,000 tonnes slated for delivery by 2028. So that, by and large, Peter, is the lithium conversion gap, one supply and demand thesis which is very strong and on everyone's lips within the critical mineral space in North America.

Peter Milios: Thanks, Alex. And you recently announced the formation of a committee with the W8banaki Nation. Can you please explain the significance of this?

Alex Hanly: Yeah. The W8banaki are obviously the traditional owners of the broader Bécancour region. It actually, the nation itself, extends all the way down to Portland. So, all the way down to the US, they've got quite a large tenure, huge history within the region. They've been obviously dealing specifically with the Bécancour Industrial Park and the clients there, including Nemaska Lithium, Nouveau Monde Graphite and a number of other existing or pre-existing companies that have been there for 30 years. So, they understand chemical manufacturing, they understand processing and chemical plants. So, they've been very practical, pragmatic. They've got a very strong understanding of the battery supply chain and where they fit into it. Obviously Bécancour is really a big part of the battery transition valley that's been established in Quebec.

So, this committee is obviously the first steps between LU7 and the W8banaki, forming a committee to discuss how we go about the next steps of formation of an agreement in the next few months, but also obviously collaboration on the impact analysis. Now, as we've reported previously, there's been no known archaeological issues associated with that site at Bécancour on Lot 22. So, now it's just trying to understand the impact of the process, if any, on the Bécancour area and the socioeconomic impact as well. So, this is just the early stages, Peter, but from initial discussions they're very practical and pragmatic and willing to work with us.

Peter Milios: And what are the structures of the joint committee?

Alex Hanly: The structure, as I said, it's forming the committee, where we have essentially two delegates from either side to talk about how we go about the next stages of forming a formal agreement. Obviously, we're just under option agreement at the moment at Bécancour. So when that does trigger and we do purchase that ground, there'll be a little bit more, I suppose, meat on the bones in terms of what we do within the local community. Obviously, training for our staff is very important for LU7 on what the W8banaki Nation are all about, their customs, but also how we can integrate not only the W8banaki but the Bécancour community at large within process training, obviously employment, and also community initiatives, which is obviously something that we're all familiar with in the industry.

Peter Milios: And looking more broadly, this month you also announced news that the company has been officially quoted on the Frankfurt stock exchange and the US-based OTC Markets. What benefits do you see from this?

Alex Hanly: Yeah. The obvious benefit, Peter, is obviously a broader exposure. We've been marketing the company globally since, well, for about 12 months now. It's probably been about 12 months since we got back onto the boards as Lithium Universe. We've done lots of roadshows throughout Europe and Germany and Switzerland, really building up that, I suppose, the knowledge around this conversion gap that we spoke about earlier and what we're doing to address that. So, a natural, I suppose, home for us is obviously getting a presence there as well. A lot of the European investors are very familiar, like Australians are with the ASX, to the Frankfurt and London Stock Exchange. So, with some embedded history there with lithium, with AMG, and obviously Rocktech, it was a very easy home to find ourselves within the Frankfurt Exchange.

From an OTC perspective, obviously, this is just a stepping stone for us into the North American market. But really, what we see here is a very similar story. We talk to a lot of people in North America who want exposure to Lithium Universe, and they're not really willing to go all the way to the ASX. So, this is really a bridging OTC pink listing where they can get that exposure in North America.

Peter Milios: And Alex, just to wrap up, what key news flow are we expecting to see from LU7 over the next 6-12 months?

Alex Hanly: Yeah. So, the next six months, or probably just short of six months, obviously we're pinning our ears back getting this definitive feasibility study done. So, that's currently progressing very well, and we've got no issues in on meeting the end-of-year date that we've set. So, we should see that come out in the next few months. And obviously I'll just stop short of saying that there's a lot of meetings currently going on, both here in Australia and in North America, to talk about offtake and potentially feedstock as well. So, lots happening, Peter.

Peter Milios: Alex, thank you so much for your time.

Alex Hanly: Perfect, Peter. Thanks, mate.