Developing a vertically integrated lithium processing hub in Quebec

Alex Hanly, CEO of Lithium Universe Limited (ASX:LU7), provides an update on the company's projects, discussing progress towards developing the Quebec Lithium Processing Hub.

Paul Sanger: Today, we're talking to Lithium Universe (ASX:LU7), which has a market cap of around $20m. Lithium Universe plans to construct a project in Quebec to assist Canada with its transition towards clean energy. We have with us today, CEO Alex Hanly. Alex, welcome back to the network.

Alex Hanly: Good day, Paul, thanks for having me.

Paul Sanger: Now, to kick things off, Alex, maybe for new investors, can you just provide us a brief overview of the Lithium Universe?

Alex Hanly: Yeah. Lithium Universe recently just came back onto the boards after a re-compliance. The company was originally named Mogul Games Group, ASX Ticker MGG. And Mogul Games earlier this year picked up a suite of projects across Australia and Canada, focused on lithium and rare earths.

Paul Sanger: And during the June quarter, you announced agreements to purchase five lithium projects across Canada and Australia. Can you tell us a little bit more about these projects?

Alex Hanly: Yeah, yeah, definitely. So the project that we have down in Tasmania is called Voyager, and it is a rare earth project right next door to AVX Resource, which have a resource of about 27 million tonnes at the moment. And it's growing quite rapidly. So that's quite a large tenure down there in Tasmania. We've got a small position, a small lithium project near Bald Hill in Mt Marion. And then the focus in Canada is within Ontario and Quebec. In Margot Lake in Ontario, we've got a small project, about 27 square kilometres right next to Frontier Lithium's Spark and PAK deposits up in the Red Lake district. And then over in Quebec, all of our focus is currently within the Apollo Lithium Project situated in James Bay. And the Apollo Lithium Project, Paul, is situated right in the middle of Patriot Battery Metals Corvette and Winsome Resources Adina Project, within 30 kilometres of both.

Paul Sanger: Alex, I interview a lot of similar sort of companies and this question comes up all the time, and it's in regards to how are you going with those regulatory approvals and permits for the projects. It seems to be a thorn in most companies' side, how's that look for you at the moment?

Alex Hanly: Yeah, no issues from our side, Paul, we've in Quebec at the Apollo project we got obviously statutory approvals and First Nation approvals to get on ground for earlier stage expiration and we've actually already gone down the process and got approved for a drill permit as well. So, it shows that it's quite a well-oiled machine over in Quebec. And yeah, we've got everything we need to get going.

Paul Sanger: And tell me a bit more, obviously a new company with a new mission, how have the management and operating teams now been finalised?

Alex Hanly: Yeah, that's right. So Paul, we've been casting the net quite widely with our dream team, obviously spearheaded by Iggy Tan, as you know. So, Iggy obviously spent his time, I suppose making a name for himself at Galaxy Resources where he spearheaded that company up to about a $2.5 billion valuation when it was merged with Orocobre (ASX:ORE). Now, during his time he built the first, I suppose fully vertically integrated large-scale mine or refinery project encompassing the development of the Mt Cattlin Project in WA and the Jiangsu Lithium Carbonate Plant in China, which was a big step in the early stages of the lithium industry.

So, we're in good hands with Iggy and we've brought onto the board two key appointments, being Dr Jingyuan Liu. Jingyuan actually built the Jiangsu Lithium Carbonate Plant for Galaxy and continues to consult as an international technical expert for lithium downstream processes. So he's a great appointment. And finally, Pat Scallan, Pat ran Greenbushes as general manager for 25 years. So we've got everything from exploration all the way through to downstream and then final markets. So, we've then assembled a very, I suppose, broader team encompassing Terry Stark, former GM of operations with Galaxy. We've also got John Loxton who built the Jiangsu Lithium Carbon Plant for Hatch. So, again we've got all the different facets covered Paul, and we're ready to get going.

Paul Sanger: Great. Let's move on to Iggy, who's obviously the Non-Executive Chair. Now, Iggy has a grand plan for a concept that the company's calling the Quebec Lithium Processing Hub. Can you tell us a little bit more about this?

Alex Hanly: Yeah. Definitely, Paul. So, the Quebec Lithium Processing Hub is targeted to really, I suppose, focusing on the current hole which is in the Quebec, or the provincial lithium industry. There's obviously a lot of exploration attention currently going on in James Bay with Corvette, with Patriot Battery Metals, 109 million tonne resource, and James Bay recent upgrade to 110 million tonne resource. So, in terms of perspective, both of these resources are number one and two, biggest spodumene resources in the Americas, and in the top 10 globally.

So, there's bound to be more exploration, I suppose exploration success in James Bay, but there's currently no production or processing within the province itself. So it's really forcing juniors and explorers to look downstream a lot earlier than what they would've had to do before. It's not as simple as what we'd have in WA where you can sign up a very easy offtake and send that over to China for processing. There was a recent mandated divestment by Sinomine when they had equity within Power Metals Corp and they also signed off the offtake agreement there. So we're seeing almost like the government's forcing a downstream solution onto junior miners, Paul.

Paul Sanger: Yeah. And I have to agree, you mentioned James Bay, I think it gets people's attention because James Bay has been in the press quite a lot recently, as you alluded to. So let's just move on, you had some recent news out, you've appointed Primero Group as a lead designer of the concentrator engineering study. Can you comment on the significance of this announcement?

Alex Hanly: Yeah, that's right Paul. So Primero have come on board, very happy with their appointment. We're working with the guys in WA. We've also met with the Montreal office. The Primero Group themselves have sort of defined themselves as the lithium experts when it comes to concentrating and mining. They've got experience at Bald Hill, also Covalent Lithium's Mount Holland Project, and obviously, the famous Pilgangoora. Over in Quebec, they're working with the James Bay project run by Allkem as well. So there's good pedigree there with Preimero Group. And what this means for Lithium Universe is we're already looking at what we're going to design over there.

Paul Sanger: And yeah, what advances does Primero bring to the process?

Alex Hanly: A lot of that experience. We have an existing design, as I said, Iggy built the Mt Cattlin Project in WA. We're going to look at a very similar design, a 1 million tonnes per annum mining operation, then going, I suppose an output of 140,000 tonnes per annum of spodumene coal. Because the region is becoming typical for coal spodumene, we're going to focus on a very simple four-stage crushing circuit, moving through a dense media separation circuit as well. So, it's very well-defined what we want to design. And Primero are the experts in up-to-date technology.

Paul Sanger: And would it be fair to say you appointed to Primero, but at the end of the day, they wouldn't engage with unless they believe in the project?

Alex Hanly: Yeah, that's right. It's a two-way street as you say, and we've had them on board over the last couple of weeks, and the guys really like the story. They like what we're trying to do within the region and they're like us, they're just keen to build projects.

Paul Sanger: And look, following on from the Primero Group coming on board, you just announced the appointment of Hatch. Why is Hatch such a key appointment?

Alex Hanly: Similar to Primero, Paul, Hatch has more than 70 years of experience of project delivery experience in Quebec and really has pioneered the use of modular construction up in Quebec and what will most likely be used up in James Bay. So, they know the environment remarkably well. Also, Hatch actually built the Jiangsu Lithium Carbonate Plant or designed the lithium carbonate plant for Iggy back in the day. And a lot of the designs that we're actually going to use in Quebec are built off that successful project. And as you may know, Jiangsu when it was commissioned, it was the biggest lithium carbonate project in China, but still remains to this day as I suppose, a benchmark for quality output and total sort of design.

Paul Sanger: And so what exactly are Hatch working on for Lithium Universe?

Alex Hanly: Currently, they're looking at a location study for the refinery where that will, or most likely is to be situated. There has been a few companies that have done this process before, but we're going at it with new fresh eyes and trying to understand the best location. We're also in early-stage design as well, using conventional kiln technology for the conversion of spodumene and then sulfuric acid sulphation as well. So it is very typical and very similar to what Iggy built at Jiangsu Lithium Carbon Plant in China.

Paul Sanger: Yeah. And as you said, the credibility that Hatch brings to Lithium Universe, well renowned. And a number of other clients I know use Hatch in the market does take notice when someone like that is involved with a company. So I totally get that. Alex, final question, and I know you've had a busy few months, but we can't finish without asking this question. What should investors be looking for over the coming months?

Alex Hanly: I think, Paul, we've made it very clear, we don't mince our words when we say what we want to do. We've been very clear on our vision to the market and now it's time to put all those words into action. So we've got the team, we've got the strategy, now it's starting to put all the puzzle together.

Paul Sanger: Alex Hanly, it's been an absolute pleasure. Thanks for your time today.

Alex Hanly: Cheers, Paul. Thanks for having me.