Power Minerals extends MoU with potential Chinese offtake partner
Diversified explorer Power Minerals (ASX: PNN) has announced it has extended its memorandum of understanding with Chinese battery metals supplier Xiamen Xiangyu New Energy Co with a view to form binding agreements over the Salta lithium project in Argentina.
Under an MoU signed in July, the companies have been undertaking due diligence with the intention to execute binding funding, logistics and offtake agreements for the project, located in the Salta province in north-west Argentina’s renowned “Lithium Triangle”.
The initial timeframe was 180 days (about six months) from the date of the MoU’s execution, but this has now been extended to allow both parties to complete the due diligence process.
The final component is the successful delivery of a preliminary economic assessment (PEA) at the Rincon salar, which commenced in December and is anticipated for completion in the first half of 2023.
Power managing director Mena Habib said due diligence has progressed “extremely well” and the companies have developed a good working relationship.
“The Rincon PEA will be the final step in the due diligence process and both parties are pleased to extend the MoU to allow for its completion,” he said.
Recent lithium brine testing
Xiamen Xiangyu recently completed a successful 40-litre bulk sample test of brines from each of the Incahuasi, Rincon and Pocitos salares (salt lakes) within the project, which confirmed the brine quality and suitability from each salar.
The supply chain company will now conduct a site visit to the Salta project.
Part of Shanghai-listed Xiamen Xiangyu Co, Xiamen Xiangyu New Energy sources supply of lithium, nickel, cobalt and other raw metals for processing plants and battery manufacturers and end-use by automobile manufacturers and other battery technology industries.
Xiamen Xiangyu is the second China-based potential offtake partner Power has been working with – it also sent bulk brine samples to Shenzhen-listed resin manufacturer Sunresin last quarter.
Salta lithium project
Power’s Salta project consists of five salares within seven mining leases over a total project area of 147 square kilometres.
The Incahuasi salar is located immediately adjacent to Ganfeng Lithium Co’s project and the Rincon salar is adjacent to Rio Tinto’s (ASX: RIO) project which was acquired last March from Rincon Mining for US$825 million (A$1.28 billion).