Argosy Minerals has signed binding investment and offtake agreements with one of China’s fastest growing battery materials companies Quingdao Qianyun High-tech New Material, strengthening its position as a key lithium producer.
The agreement involves a US$7.5 million ($9.55 million) upfront prepayment for an agreed amount of battery grade lithium carbonate equivalent (LCE) product during the first year of production at Argosy’s Rincon lithium project in Argentina.
The upfront funds exceed the Stage 2 development expenditure budget for the Rincon project.
A separate five-year long-term offtake agreement was also signed for 1000 tons per year of potential Stage 2 product from years two to six of production of battery grade LCE product from the project.
A long term joint venture agreement will be established by both companies to consider acquisition and development of lithium project opportunities in China over the next two years.
Argosy managing director Jerko Zuvela called the transaction a “company transforming event” and said it will fast track development of the Rincon lithium project.
“On completion of this transaction, Argosy will have substantial funding (together with its technical and processing expertise), plus a strategic shareholder and customer in Qinyuan to fully develop and maximise the potential of Rincon and exploit the insatiable demand growth of the battery grade LCE market,” he said.