Pilbara gold hopeful De Grey Mining says it is looking to sell or spin-out lithium rights amid hot market
De Grey Mining owns Australia’s biggest greenfields gold discovery, but is now about to enter the superheated Pilbara lithium sector as well.
Emerging gold player De Grey Mining says it is about to enter the superheated Pilbara lithium sector, with the company considering a spin-out of tenements in the heart of the region’s lithium belt.
De Grey managing director Glenn Jardine told shareholders at the company’s annual meeting on Thursday the company holds a “commanding” tenement position in the Pilbara’s lithium belt, some within spitting distance of Wildcat Resources’ Tabba Tabba lithium project.
Wildcat has become one of the hottest stocks on the market this year after acquiring Tabba Tabba from Global Advanced Minerals, surging from a 2023 low of 2.3c to as much as $1.01 in early November.
The explorer is now capitalised at just over $1bn after Chris Ellison’s Mineral Resources paid $159m to snare a 20 per cent stake in the company in October.
De Grey is focused on the development of its Hemi gold discovery, which this week crossed the 10 million ounce mark, but Mr Jardine told shareholders that 2017 drilling by the company — before the Pilbara lithium frenzy took off in earnest — had hit intersections of lithium grading of up to 2.55 per cent.
The lithium hits were from a gold prospect only about 20km from Wildcat’s Tabba Tabba project, according to the presentation delivered to shareholders.
The initial drilling results also included significant hits for caesium — a rare critical mineral used in medical imaging, by the oil and gas industry, and by the defence sector in infrared detectors, night vision goggles and other hi-tech applications.
Mr Jardine said De Grey had launched a process to work out the best way to yield value for shareholders from the lithium and caesium rights on its tenements.
The company was considering spinning out the rights into a separate listed vehicle through an initial public offering or a backdoor listing through a shell, or selling them outright to one of the many majors operating in the region — which includes cashed-up majors such as MinRes and Pilbara Minerals.
Pilbara Minerals also has its annual shareholder meeting on Thursday. Pilbara Minerals chairman Tony Kiernan told shareholders that recent falls in the lithium price did not pose a major concern for the company.
“While the long-term outlook is excellent, we know there will be price and demand variability from time to time. This is not to be unexpected given the technologies being developed to drive the world’s clean energy requirements,” he said.
“Pilbara Minerals, however, is an established producer with a strong balance sheet and strong
long-term customer relationships which allows variability to be addressed.”
Mr Kiernan said the company was focused on getting its costs down as it looks to again expand its Pilgangoora lithium mine in the Pilbara to allow the export of up to a million tonnes of lithium concentrate a year.
The Pilbara Minerals chairman told shareholders the company was also nearing its ambition of owning a share in downstream lithium refining.
“Last month, we exported our first shipment of spodumene concentrate to be processed in the new lithium hydroxide chemical facility in South Korea as part of our joint venture with
POSCO, which will commence commissioning soon,” he said.
Pilbara Minerals could eventually emerge with a 30 per cent stake in the 43,000 tonne facility in South Korea.
De Grey shares closed down 5c to $1.305 on Thursday, with Pilbara Minerals up 8c to $3.62.
More Coverage
