Earlier this week, Neo Lithium (NLC.V) entered into an equity subscription agreement with a subsidiary of Contemporary Amperex Technology (CATL) (SZSE: 300750), a Chinese battery manufacturer specializing in lithium-ion batteries for electric vehicles and energy storage systems.
The company finished a pre-feasibility study in May 2019, and will finish the definitive feasibility study (DFS) with help from CATL to determine the financing requirements for the 3Q Project. The DFS will evaluate the economic suitability for a project involving nameplate production capacity of 20,000 metric tons of battery quality lithium carbonate, with expansion capacity of upwards to 40,000 metric tons per year.
“We are delighted to receive an endorsement from a globally recognized, leading industry player such as CATL as we continue to further advance our strategic objectives at the 3Q Project. As we have said many times, we believe it’s extremely important to have a strategic partner with unique knowledge of the expected end market demand, before concluding the DFS. We are confident that CATL will help us define the battery grade quality and certification of the final product to highest levels,” said Waldo Perez, CEO and director of Neo Lithium.
The investment will strength Neo Lithium’s financial position and strategy and aid them in achieving their aims of development and construction of the company’s Tres Quebradas Lithium Project in Catamarca Province of Argentina.
The company has provided corporate updates about their goal of selecting a strategic and financing partner over the past few months. They’ve since recognized that the pandemic has affected the project financing activities globally in the lithium industry, and has since decided to move forward with the DFS with help from a global industry leader. This will help them minimize the technical risks and adapt the project to meet the best industry standards regarding quality and specifications.