SVOLT MoU shows St George Mining’s Mt Alexander lithium project is on the radar of battery giants

St George Mining may be at an early stage when it comes to lithium development, but it already has one of the world’s biggest electric vehicle battery producers in its corner.

The emerging lithium explorer announced this morning it had entered into a memorandum of understanding to establish a strategic relationship to collaborate with SVOLT Energy Technology Co.

The SVOLT MoU will last for an initial term of two years, with a range of potential outcomes including a $5m investment in St George (ASX:SGQ) by SVOLT subject to pricing and completion of due diligence, offtake arrangements to secure up to 25% of future spodumene concentrate production from SGQ’s Mt Alexander lithium project, funding support and a potential JV to acquire and develop new lithium projects.

It is a particularly exciting development for St George, which last month signed an MoU to pursue a similar relationship with the world’s leading cathode precursor producer Shanghai Jayson New Energy Materials Co.

SVOLT has operations in domestic China and abroad that supply batteries to more than 30 auto makers and other customers for EVs and energy storage, and pioneered the first mass produced cobalt-free battery.

“We are excited to announce a strategic relationship with SVOLT, one of the giants in the global EV battery market,” SGQ executive chairman John Prineas said.

Support to bring lithium to market

Lithium prices have surged to record levels in 2022 on the back of a major shortage in raw materials for EV batteries.

The interest shown in SGQ’s Mt Alexander project is evidence of the desire of downstream suppliers to support new production in a market which will struggle to keep up with demand for EVs as internal combustion engines are phased out over the next decade.

It has been a whirlwind since SGQ announced that the discovery of outcropping pegmatite dykes over 15km within its tenements, located along strike from Red Dirt Metals’ (ASX:RDT) Mt Ida deposit in early September.

It later confirmed high grade rock chips with lithium samples of up to 2.7% Li2O within the 1.7km long Jailbreak lithium prospect, with strong caesium, tantalum and rubidium values.

More than 20,000m of drilling will be completed in the first half of 2023 to outline the extent and scale of lithium mineralisation within SGQ’s land package, historically explored for nickel sulphides.

On the ground at Mt Alexander

“High-grade lithium commences from surface at Mt Alexander as confirmed by assays of the pegmatite outcrop, so far sampled across a broad area that spans 1.7km north-south and more than 3km east-west,” Prineas said.

“With drill programmes in progress and further field sampling underway, there is excellent potential for the footprint of high-grade lithium mineralisation to significantly increase across the more than 15km long pegmatite corridor controlled by St George.

“We are delighted that SVOLT has recognised this tremendous growth opportunity at Mt Alexander – located in the heart of Western Australia’s newest hard rock lithium province.

“Our strategic relationship with SVOLT will strengthen our capacity to accelerate exploration and development at the Project – particularly through the provision by SVOLT of technical advice for the marketing of lithium products as well as the potential provision of development funding.”

Howdy blue-chip pardners

Prineas said the deals with SVOLT and Jayson demonstrated its ability to attract ‘blue-chip partners’, which ‘speaks volumes to the potential of Mt Alexander.’

Indeed SVOLT is a major player, having been spun out of Chinese auto giant Great Wall Motor Company in 2018.

It has engaged in R&D for more than 10 years, with 10 manufacturing bases including plants established or under construction in China and Germany as well as research centres in China, Germany, Korea and India.

The non-exclusive MoU lays the groundwork for a collaborative working relationship between the groups that could extend to other lithium projects.

But for now the focus is squarely on Mt Alexander, part of an emerging new lithium district in the Mt Ida province.

Not only is Red Dirt Metals aiming to enter production within the year, but Hawthorn Resources (ASX:HAW) and Zenith Minerals (ASX:ZNC) are also exploring nearby.

Meanwhile, Liontown Resources (ASX:LTR) is developing the world’s first underground spodumene mine at the 500,000tpa Kathleen Valley operation to the north and adjacent to the Mt Ida fault.

It is a great place for SGQ to be, especially with confirmed high grade lithium pegmatite outcrops over more than 15km adjacent to the Copperfield Granite, the interpreted source of mineralised pegs at Mt Ida.

This article was developed in collaboration with St George Mining, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

The post SVOLT MoU shows St George Mining’s Mt Alexander lithium project is on the radar of battery giants appeared first on Stockhead.

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