"Lithium concentrate offtake agreement secured for Namibian producer"
"Desert Lion Energy has entered a binding offtake agreement with Chinese lepidolite converter Jiangxi Jinhui lithium which will see the company sell lithium concentrate from Phase 1 production of stockpiled material located on the company’s Rubicon and Helikon properties in Namibia exclusively to Jinhui."
"In consideration for the subscription, the company will enter into a five-year offtake agreement with Jinhui for Phase 2 lithium concentrate production produced by Desert Lion Energy from in-situ ore."
What happened to the 5 year offtake agreement with Jinhui??
The key word in there is stockpiled material. This whole time the mine hasn't been operating, its just been slowly shipping 700,000 tons worth of already mined material at 1.7% - 2% Li2O. Most Oz miners ship 6% Li2O.
"Desert Lion Energy ships first lithium concentrate to Chinese offtake partner"
"Management estimates that there are approximately 700 000 – 750 000 t of stockpiled material located on the Rubicon and Helikon properties that will produce approximately 150 000 – 160 000 t of lithium concentrate for sale to Jiangxi Jinhui Lithium Co. under the agreement over the next 12 to 18 months."
"Following the production of lithium concentrate from stockpiled material in December 2017, Desert Lion Energy will commence production of lithium concentrate from in situ ore, which is expected to commence in the second half of 2019."
18 months worth of stockpiled material should have seen Desert Lion generate revenue through to December 2019.
"Desert Lion Energy ceases all operations in Namibia"
"Namibian lithium developer and emerging lithium concentrate producer Desert Lion Energy has ceased all operations in Namibia in light of the continued decline in lithium carbonate pricing."
"Desert Lion has also commenced negotiations with its offtake partner, Jiangxi Jinhui Lithium to amend the pricing metrics under its offtake agreement in light of the current lithium carbonate pricing environment."
Looks as though the Chinese weren't happy with Desert Lion's business model & bailed.
"Desert Lion Energy Announces Nonbinding Offtake Agreement with BASF"
"The Agreement is valid through to December 31, 2019 during which time both BASF and Desert Lion Energy shall work towards completion of a definitive offtake agreement. To support the production of lithium hydroxide, Desert Lion Energy will update the previous Preliminary Economic Study (announced November 1, 2018) to a Pre-Feasibility Study, including the production of up to 10,000 tons per year of lithium hydroxide. The Pre-Feasibility Study is expected to be completed by Q4 2019."
Bit of a checkered past don't you think??
So Desert Lion begins production in March 2018 shipping only stockpiled ore at 2% that was previously mined.
Desert Lion had a potential 5 year offtake agreement on the cards with a Chinese converter & had enough material to supply them for the next 18 months to December 2019.
6 months after the mine starts up it shuts down & the Chinese company bails?? Desert Lion couldn't even make a profit from shipping already mined ore?? Really???
7 months later LPD picks up Desert Lion "for a steal". Desert Lion sign a non-binding agreement with BASF April 02 2019, LPD picks up where Desert Lion left off & now has an LOI until December 2020.
BASF needs up to 20 months to work out if this whole venture is going to work for them??
LPD Price at posting:
1.5¢ Sentiment: None Disclosure: Not Held
(20min delay)