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14/04/2024
Mining News

Infinity gets $31m funding boost for Spanish lithium play

The Spanish Government has boosted Infinity Lithium’s coffers with a cash-ringing endorsement of $31 million for its 75 per cent-owned San José lithium project as the limelight intensifies on the battery metal’s supply chain.

The grant funding was awarded to company’s wholly-owned Spanish subsidiary, Extremadura New Energies, which plans to develop an underground mine at the deposit that boasts a total indicated and inferred resource base of 111 million tonnes at 0.61 per cent lithium oxide.

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The cash allocation was part of the Spanish Government’s Ministry of Industry, Trade and Tourism’s “PERTE VEC II” process aligned to critical raw materials, with submissions totalling $888 million. The vast majority of that cash was allocated across 26 major electric vehicle projects and included $336 million for Extremadura’s giga-factory, which is planned to be a regional nerve centre for electric vehicle (EV) manufacture in Spain.

Other successful applicants in the competitive final assessment included Ford Espana, Renault Espana, Stellantis Espana, Seat S.A. and Envision AESC Spain, representing a recalibration of the automotive sector to the mass adoption of EVs. The Spanish automotive sector represents about 10 per cent of that nation’s gross domestic product (GDP) and 18 per cent of exports.

“We are very pleased with the significant funding support awarded for San José. This is a significant milestone for both the Company and the Project. The Company welcomes the government’s commitment to recognising the critical importance of lithium and its endorsement of the Project. These first funding commitments for the processing of critical raw materials in Spain places the Company at the forefront of future funding pathways at both the national and European level.”

The funding commitment to San José follows on from Infinity’s announcement last week of an updated scoping study based on 100 per cent ownership of San José, where it quoted a whopping EBITDA of $26 billion for the project, with a 26-year mine life and an annual steady-state production of 33,000 tonnes of lithium hydroxide monohydrate.

The company’s study showed a post-tax net present value of $4.47 billion and an internal rate of return of 21.3 per cent. It outlines a pre-production CAPEX after contingencies of $2.4 billion, with a post-tax payback period of 4.2 years. The figures are based on an assumed average price of $42,000 per tonne.

Infinity retains a 75 per cent ownership in the project through Extremadura New Energies, with Spanish exploration company Valoriza Mineria holding the remaining 25 per cent. But the company maintains the option to acquire Valoriza interest prior to the final investment decision being made.

The San José project sits near the town of Cáceres in the region of Extremadura, about 250km south-west of the Spanish capital of Madrid. Earlier this year, Infinity secured a long-term land lease from local owners for the development of the San José mine, which will access the lithium orebody through a tunnel at the processing plant, causing no visual, audible or vibration-based effects to the people of Cáceres.

Extremadura New Energies is proposing a fully-integrated mining and downstream processing project to produce battery-grade lithium hydroxide from San José ore.

Another Infinity subsidiary, Infinity Greentech, has confirmed the successful production of battery-grade lithium hydroxide through the application of its lithium conversion process “Li-Stream RPK”. Management says the process has confirmed more than 90 per cent recoveries from run-of-mine to lithium products.

The Spanish Ministry further noted that it is already working on a third call for funding as part of its PERTE VEC (III) funding process. It will be accepting submissions early next year with more than $2 billion in grant funding available.

ASX investors also clearly thought the big whack of cash heading to Infinity was good thing, with the biggest volumes traded in the company’s stock since March. Its share price jumped more than 88 per cent during today’s intraday trading to hit a high of 16 cents after closing last Friday at just 8.5c.

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