Perth based Lithium Australia (ASX:LIT) is assessing a number of options to resize its SiLeach® pilot plant in order to reduce overall capital expenditure.
Although the resizing will require additional engineering requirements, Lithium Australia believe the delay on the study will be negligible, with completion targeted for the upcoming quarter.
The company is also considering a new location for the pilot plant in order to maximise financial and technical benefits. The key driver for the relocation is the Australian Government’s shifting policies on research and development, which may have a major financial impact on the of the company’s plans to extract lithium from waste materials. Due to these new legislation changes, Lithium Australia will take into account offshore options in order to control financial outlay on their technology.
The reduction in capital also requires a new funding mechanism, as the Arena Investors convertible note facility that was originally in place is not ideal for the lesser amount. The company has consequently terminated its previous financing agreement and is continuing to evaluate other options.
“Changing our pilot plant strategy and reducing capital exposure is in the interests of all shareholders said LIT Managing Director Adrian Griffin.
“The support of Arena has been very important to our strategy and it is unfortunate that changes in government policy have had such an impact on our research and development plans.
“We thank Arena for its support and look forward to engaging with it as a key investor in any future relationship.
“Lithium Australia will locate its R&D activities in a jurisdiction that will provide the greatest practical benefits to its shareholders.”