Lithium Australia (ASX: LIT) has agreed to sell the non-lithium rights of its Emu Lake exploration licence to ASX hopeful Metal Hawk.
The decision comes after Lithium Australia’s ongoing review of its raw materials division.
Lithium Australia will retain the lithium rights to Emu Lake, which is about 70km north-east of Kalgoorlie in Western Australia.
The deal remains subject to Metal Hawk completing a successful initial public offering and ASX listing.
Once Metal Hawk has listed, it will issue Lithium Australia 300,000 shares at $0.20 each in consideration for the project.
Metal Hawk IPO
Metal Hawk’s interest in Emu Lake revolves around its prospectivity for nickel and gold.
The company’s decision to target nickel and gold is underpinned by a strong market outlook for both commodities.
Metal Hawk is hoping to raise $5.5 million before costs via the issue of 27.5 million shares at $0.20 each.
The expected date for its listing on the ASX is 12 December 2019.
Battery recycling technology
Today’s deal will diversify Lithium Australia’s commodity exposure while it focuses on advancing the processing technology and lithium-ion battery recycling divisions of its business.
Last month, Lithium Australia’s 24%-owned Envirostream Australia Pty Ltd secured a deal with Korean-based SungEel Hitech.
The agreement will involve Envirostream supplying SungEel with a lithium, cobalt and nickel mixed metal dust it has generated from spent lithium-ion batteries.
SungEel will then process the dust into cobalt, lithium and nickel chemicals for incorporation in new batteries.
According to Lithium Australia, as one of the world’s largest battery recyclers, SungEel’s work is “vital to the implementation of a circular battery economy” worldwide.
Lithium Australia is also looking to help Envirostream expand its spent battery collection network across Australia as well as its processing capacity to keep retired batteries from landfill.
By late afternoon trade, Lithium Australia’s share price was up 3.13% to $0.033.