ASX's newest lithium stock has led the charge in the lithium rally today, with shares surging over 18% ending the day at $57.5 cents a share.
While having a rather lacklustre start upon IPO last week during the wider market selloff and institutional re-balancing, the hard rock spodumene developer surged higher on massive volumes and no news. So what is the company all about?
Leo Lithium has a 50% joint venture ownership in the Goulamina Lithium Project in Mali alongside Chinese giant, Ganfeng Lithium.
The Goulamina Lithium Project is one of the world’s largest undeveloped high quality spodumene deposits. The project has a massive life of mine of over 20 years, is also a large scale and low-cost open pit project. Once operating at full capacity, it is expected to produce 726,000 tonnes of annual spodumene concentrate at a market leading low average cash cost of US$312 per tonne.
Leo Lithium are initially aiming for stage one production of 506,000 tonnes of spodumene concentrate p.a. This is scheduled to commence during the first half of 2024, but work is underway to expedite this timeline.
One of the main positives for shareholders and prospective investors is that the project is also fully funded. Ganfeng has contributed US$130 million in equity funding to the joint venture and will either source up to US$64 million in external debt or provide US$40 million of debt itself to fund the development of stage one production.
Another positive is that the company has an experienced leadership team. This is being led by former Galaxy Resources CEO, Simon Hay. As many investors would know, Mr. Hay was CEO of Galaxy until it merged with Orocobre to form Allkem Ltd which currently boasts a massive market cap and over a 10% share of the global lithium market.
Simon Hay stated:
“We have an exciting journey ahead as we work to realise the full potential of Goulamina and bring the project into production, alongside our JV partner Ganfeng. We have wasted no time in getting started with development already underway including the 2022 drilling program, procurement of long lead items and commencement of roadworks. Socialisation with local communities is also well advanced. I look forward to keeping shareholders updated of our progress as we fast track Goulamina into production.”