Leading diversified and battery-related chemicals manufacturer...

Leading diversified and battery-related chemicals manufacturer and 4 billion CNY capped Shenzhen-listed Wuxi Baichuan Chemical Industrial Co (SHE:002455) has moved in on lithium and cobalt explorer MetalsTech Limited (ASX:MTC) with the company announcing that Wuxi will snap up an initial 9% stake through an escrowed $1.8 million investment in MTC, having received Chinese Regulatory Approval from the “Foreign Affairs Bureau – Commerce Department” on Thursday last week. Wuxi look to be chasing MTC for further investment opportunity at project level as well as a board seat however they need to buy up and move from the 9% initial stake to 12.5% and 15% respectively to lock in those rights, with MTC agreeing to help them mop up 5,000,000 shares from the market as part of the deal to get there. Wuxi are understood to be aggressive and looking to gain exposure to MTC’s cobalt and lithium through both company and project level investments. The cobalt price recently hit >US$90,000/t which is a four-fold increase over the last two years.

MTC has flagged that it is looking to capitalise on overwhelming interest from strategic investors and battery-related end users to fund its lithium projects at ‘project level’ to minimise shareholder dilution going forward and maximise share price appreciation and ultimately shareholder value. If Wuxi buy up and move to 12.5% they will earn certain rights to buy into MTCs lithium assets at project level capped at a 10% interest.

The timing for investors couldn’t be better with MTC expecting to announce first results of a maiden 2,000m drilling program at its 100% owned Adina Lithium Project in Quebec soon where it is hoping to capitalise on strong historical exploration where > 3% Li2O was encountered in surface rock chip assays. Adina is not too far from MTC’s Cancet Lithium Project where they have had tremendous early exploration success including 18m @ 3.15% Li2O from 8m and 21.5m @ 2.24% Li2O from 5m. MTC are treating Cancet and Adina as a co-development opportunity, with Cancet potentially providing high grade feed initially which starts from surface and is a stone’s throw from road and power while Adina proves up in later years to ramp up production. With Wuxi in the team and an eye on production, MTC can look at a potential beneficiation strategy which could add significantly more value to the economics of their efforts going forward.

The high grade cobalt opportunities that MTC owns are well and truly flying under the radar despite being some of the most prospective on the ASX. The cobalt grades at the Bay Lake and Rusty Lake cobalt projects look incredible.

The Bay Lake Cobalt Project boasts assays of over 15% cobalt in silver-cobalt veins and over 2% cobalt in waste dumps on site.


MTC have an option over the Rusty Lake Cobalt-Silver Mine which is expected to complete soon. Brace yourself for these results as an indication of potential prospectivity of what was a historically producing mine, Stockpile grades of up to 11.85% Co, 8.64% Ni and >10,000 g/t Ag.

Last year prominent metals and mining analyst Gavin Van Der Wath gave MetalsTech (ASX:MTC) a screaming BUY, attaching a share price target of $0.97 per share. Now that MTC have locked in a serious strategic partner, I wonder what Gavin thinks now?

More about the author

I am a senior advisor with Sydney-based Hunter Capital and author of the free daily stock market wrap “Rat’s Rant”. I have been searching for a worthy pick in the lithium and cobalt space all year and see MTC as a real contender.

With a major battery chemicals manufacturer taking a 9% stake, drill results imminent and two phenomenal high grade cobalt opportunities, I can see some major value catalysts on the horizon if MTC deliver.

Don’t say I didn’t warn you!

If you would like to subscribe to my free daily stock report, drop me a line at [email protected]

Go Hard!
Nick Kelso

Do Your Own Research - This IS NOT personal advice.