Zenith Minerals Limited (ZNC) entered into an agreement to form a lithium joint venture (JV) with EV Metals Group plc (EVM) to explore for, mine and process mineral resources containing lithium and other battery metals (JV Agreement) in January 2022.
EVM is a global battery materials and technology company committed to a clean energy future. The JV Agreement provides for ZNC to be developed as a pure lithium company focused on lithium and related battery metals listed on ASX.
The JV Agreement includes ZNC’s 100% owned Split Rocks and Waratah Well lithium projects (Initial Projects) and provides each party with the non-exclusive rights to introduce additional projects containing lithium and other battery metals (Lithium Minerals) to the JV.
Both Initial Projects are 100% owned by ZNC with EVM earning a 60% interest of the rights to all Lithium Minerals in each project by sole funding the completion of the feasibility studies up to the decision to mine within 24 months from the start of the JV Agreement.
EVM is required to arrange 100% of the financing for the capital costs of development, construction and commissioning of any future mine, processing plant and related infrastructure.
EVM is required to spend a minimum of $7M on exploration for Lithium Minerals in each of the Initial Projects within 24-months.
If EVM fails to complete its minimum expenditure obligations, it will be deemed to have withdrawn from the projects and will not earn an interest in the project lithium rights.
As part of the execution of the JV agreement between Zenith and EVM, a placement of $6m was taken up by EVM by way of the issuance of 20m shares in Zenith at $0.30, a 20% premium to vwap at the time.
The strategic plan for ZNC is to focus on battery metals projects and EVM has shown interest in expanding its exposure to a broader asset base from the start of the initial JV agreement. The JV agreement requires each party will fund its share of costs of the development of each lithium project in Australia on the basis of 40%/60% ZNC/EVM respectively.
About EV Metals
The strategy of EV Metals Group is positioned to become a global leader in battery materials and technology.
EVM’s unique business model is based on the upstream, midstream and downstream integration of proprietary supply chains. EVM is fast-tracking the staged development of midstream and downstream processing facilities for production of high purity chemicals and cathode active materials (CAM) containing lithium, nickel, cobalt, manganese and other metals required in rechargeable batteries used in electric vehicles and renewable energy storage.
EVM is developing transparent and geopolitically aligned supply chains targeting electric vehicle and battery cell manufacturers in high growth markets across UK, Europe and the Kingdom of Saudi Arabia (KSA).
EVM is based in Western Australia with over 100 personnel at offices and facilities in Perth, KSA, UK, Germany and Poland. The key executive and management team have over 180 years of combined experience in midstream and downstream processing of minerals, metals and chemicals for global markets and upstream integration through exploration and mining.
EVM is currently developing the world’s first integrated Battery Chemicals Complex at Yanbu Industrial City in the Kingdom of Saudi Arabia which will produce high-purity chemicals from intermediate products from upstream supply chains required in the downstream production of cathode active materials.
Yanbu provides a strategic location adjacent to a deep-water port on the Red Sea and ideally situated for importing raw materials and exporting battery chemicals to target markets. The Battery Chemicals Complex comprises staged development and expansions of a Lithium Chemicals Plant, a Nickel Chemicals Plant and Cathode Active Materials Plant.
EV Metals integrated supply chain
The acquisition of Battery Materials Business and Technology shifts global focus of EVM to growth markets for high energy density (high nickel NCM) CAM and lower energy density (LFP) CAM in UK, Europe and the Kingdom of Saudi Arabia. The acquisition is also globally strategic as it:
- Completes integration of upstream and midstream supply chains with downstream customer focused and customer facing cathode active materials business.
- Retains and preserves unique IP (know how and show how) and high value technical personnel who developed CAM Technology, Pilot Plants, Laboratories and Battery Technology Centres.
- Provides the platforms for industrialisation of CAM Technology through the development CAM Plants for electric vehicle and battery cell manufacturers in United Kingdom, Europe and the Kingdom of Saudi Arabia.
A substantial shortfall of over 600,000 tpa of cathode active materials is forecast in Europe in 2030.