On the evening of April 6th, Shengxin Lithium Energy (002240) issued an announcement that based on the optimistic development prospect of Chile's lithium industry, Shengze International, a wholly-owned Hong Kong company, exercised the warrants issued in January 2022 and continued to subscribe for 29.38 million shares of Chile's lithium industry. Among them, the exercise price is C $0.85 per share, and the investment amount of the exercise is C $3.64 million (about RMB 18.55 million); Shengze International continues to subscribe for 29.38 million non-publicly issued shares of Chilean Lithium Industry at a subscription price of C $0.95 per share, the investment amount is C $27.91 million (about RMB 142 million).
Since the first investment in the Chilean lithium industry in January 2022, to this exercise and continued subscription, Shengze International has invested a total of 34.5539 million Canadian dollars (about 176 million yuan) in the Chilean lithium industry. After the completion of the above investment, Shengze International holds a 19.86% stake in Chile's lithium industry, making it the largest shareholder in Chile's lithium industry.
Chilean lithium is a company registered under Canadian law and listed on the Toronto Stock Exchange in Canada on December 20, 2017, specializing in mining exploration and development, according to the announcement. So far, Chile's lithium industry has a market capitalization of about C $170 million.
Chile's lithium industry has 18 mining projects in South America, including 12 salt lake brine projects in Chile with a total area of 688 square kilometers and one salt lake brine project in Argentina with a total area of 233square kilometers. and five gold, silver and copper projects with a total area of 204.29 square kilometers.
Chile's lithium industry owns the mining rights of Arizaro Salt Lake in Salta province, Argentina, covering an area of 233square kilometers. In February 2022, Chile Lithium Industry announced the preliminary resource information of the Arizaro salt lake project: the proved resource is about 1.42 million tons of lithium carbonate equivalent, and the lithium grade of salt lake brine in the mining right area is the highest 555mg/L, with an average grade of 298mg; at present, the proven area accounts for 29% of the total area of mining rights. Chile's lithium industry plans to invest US $2 million within six months to further step up exploration efforts to expand resources.
At present, with the rapid development of the global new energy vehicle and energy storage industry, the market demand for lithium products is strong. Due to the long mine development cycle and epidemic situation, the progress of investment, development, production and construction of lithium mines at home and abroad is slow in recent years, resulting in a shortage of lithium ore supply. Under the dual stimulation of the relative shortage of upstream supply and the rapid rise in market demand, the price of lithium ore continues to rise. The price of lithium concentrate rose to $2810 a tonne from $405 a tonne at the beginning of 2021, according to the Asia Metal Network. Lithium ore has become a bottleneck restricting the development of lithium power new energy industry, and ensuring a sustained and stable supply of lithium ore raw materials has become one of the most important tasks of lithium salt production enterprises.
As a leading lithium salt producer, Shengxin Lithium production capacity is growing rapidly and the demand for lithium ore raw materials is also growing rapidly. In addition to continuing to subscribe for part of Chile's lithium industry, the company said it would continue to expand the layout of lithium resources projects around the world.
On the 6th, Sheng Xin LiNeng also announced that Sheng Yi International, a wholly-owned Hong Kong-owned company, intends to subscribe for 3.7 million shares of Australia's ABY at a total price of A $0.75 per share (equivalent to about 13.36 million yuan at the current exchange rate), accounting for 3.4% of the total pre-IPO share capital of ABY. On April 6, 2022, the two sides jointly signed the Investment and share subscription Agreement and the off-take and sales Agreement.
Data show that ABY is a battery metal company registered in Australia, with mineral resources in African countries such as Sudan and Ethiopia, and its core assets are mainly Ethiopia's Kenticha lithium mine (51% stake).
In terms of resources, the Kenticha lithium deposit began mining in 1990. The area has highly mineralized lithium cesium tantalum (LCT) pegmatite, has proven lithium resources of 67.4 million tons, and the average Li2O grade is 1.03%. The total resources range from 8000 to 110 million tons of lithium resources, equivalent to more than 1 million tons of Li2O, and the resources in the southern and northern reserved areas have great potential for future growth. The overall technical and operational team of Kenticha Lithium Mine comes from the former Galaxy Lithium Industry in Australia, and has a long-term and good cooperation with Shengxin Lithium Energy. The first phase of 200000 tons / year (equivalent to Li2CO3 equivalent 30, 000 tons / year) lithium concentrate is expected to start delivery in the second quarter of 2023, and the mine life is expected to exceed 18 years.
According to financial data, ABY has total assets of A $7 million as of June 30, 2021, with a recent increase in equity financing of A $15 million, and ABY's net worth is now about US $20 million.
According to the Investment and share subscription Agreement, six months before the first production of the products of the Kenticha project, Shengyi International undertakes to make an irrevocable advance payment of US $20 million to ABY; the two parties will separately negotiate the detailed schedule of the advance payment deduction.
The off-take and sales Agreement requires ABY to develop the Kenticha project in the southern Ethiopian state of Oromia to sell and deliver lithium concentrate products to Shengyi International. The agreement is valid from the date ABY informed the company that the product was ready for shipment until December 31, 2025. Unless otherwise notified by ABY before the end date, the parties agree to automatically extend this Agreement for another 2 years from the end date. At the same time, ABY will provide no less than 60, 000 tons of lithium concentrate in the first contract year and 60, 000-80, 000 tons of lithium concentrate per year during the remaining contract year. If ABY has excess lithium concentrate in the future, both parties can provide Shengyi International with additional lithium concentrate on the terms agreed in writing.
Although the pre-IPO share subscription aims to lock in the lithium concentrate underwriting rights of the Kenticha project and provide sufficient lithium resources for the future development of the company's lithium industry, Shengxin LiNeng stressed that due to the influence of international political, economic environment, industrial policy and market fluctuations, the project schedule may not be as expected, and there is a certain degree of uncertainty in investment income and underwriting.
According to the latest research report of Everbright Securities, the distribution of Shengxin lithium energy resources continues to increase, and overseas underwriting agreements help to supply raw materials. At present, the company Yelonggou lithium mine has been mass production, can contribute about 75000 tons of lithium concentrate every year. Other resource mines such as the Sun Estuary, the Lithium Mine and the Sabixing Lithium-Tantalum Mine in Zimbabwe are in the prospecting stage. At the same time, the company has lithium ore underwriting agreements with Galaxy Resources and AVZ to help the company's upstream lithium resources supply.
Pacific Securities recently reported that Shengxin Lithium Energy currently has 715000 tons of LCE equivalent, and is expected to underwrite + 50% of its own lithium salt production in 2022. (1) the output of 2021 Longgou lithium concentrate is 41800 tons, and the output in 2022 is expected to be 70, 000 tons, equivalent to about 10, 000 tons of LCE. The cost of Yelonggou lithium concentrate is about 3000 yuan. (2) the planned raw mineral capacity of Sabi Star is 700000 tons / year, corresponding to 200000 tons / year lithium concentrate, which is expected to be completed and put into production by the end of 2022. (3) the company signed a long-term association with Galaxy Resources and AVZ, underwriting 60, 000 tons and 160000 tons of lithium concentrate respectively. (4) the company also has the management right of SDLA Salt Lake, and the production capacity of SDLA Salt Lake is 2500 tons LCE equivalent.
In addition, the battery network noted that Shengxin Lithium Energy's continuous layout of upstream lithium resources has also attracted the attention of lithium battery head enterprises. On the evening of March 22nd, Shengxin LiNeng disclosed a plan for a non-public offering of shares, and the company plans to raise no more than 3 billion yuan, which will be used to replenish working capital and repay debts after deducting issuance expenses. In terms of the issuing object, BYD, a specific target, will fully subscribe for the shares issued by Shengxin LiNeng in cash, and the two sides will carry out all-round cooperation in the purchase and sale of raw materials, processing of raw materials, technology, mineral resources, and industrial chain resources.
![[SMM 에너지저장 배터리 셀 시장 주간 리뷰 9.3] 동박 공급 부족으로 9월 생산 일정 제약, 에너지저장 배터리 셀 가격 견조 유지](https://imgqn.smm.cn/usercenter/tKgKv20251217171725.png)
![Lithium Carbonate Market Weekly Review: 8.31-9.3 spot lithium carbonate prices rose first then fell, overall downward trend [SMM Weekly Review]](https://imgqn.smm.cn/usercenter/PPLUj20251217171727.jpg)
