Infinity Lithium - Market Update

Battery Grade Lithium Hydroxide and Carbonate Pathways Highlights

• Reaffirmation of partnership and strategy alignment after Joint Venture meetings in Madrid, resulting in the acceleration of technical and market related work on San Jose

• Feasibility Study (focussed on the initial production of lithium carbonate) progressing well with Infinity to earn in to a 75% project interest, with further study updates expected shortly

• The importance of the ability to produce Lithium Hydroxide was reinforced at the 10th Lithium Supply and Markets Conference (recently held in the USA) as attended by Infinity and major industry participants

• Lithium hydroxide option study completed and Infinity to also progress towards lithium hydroxide Scoping Study in direct response to potential strategic investment and offtake requirements from industry players

• Multiple players are investing to transform Europe into a significant producer of lithium-ion batteries, and Infinity remains well positioned and has the flexibility to be able to meet the growing requirements to take advantage of the currently open window for strategic investment

• The availability of battery grade lithium chemical products remains in tight supply with many raw material suppliers investigating the viability of downstream processing facilities.  Infinity remains well placed as a fully integrated lithium project with key infrastructure adjacent to site

• Lithium prices are expected to remain robust and Infinity may review upgrades to its highly conservative long term pricing assumptions utilised (Scoping Study financial modelling assumptions at US$10k/t)
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Infinity Lithium Corporation Limited (“Infinity” or “the Company”) is pleased to provide an update and an outline of developments expected at San Jose. 

San Jose is 100% owned by Tecnología Extremeña Del Litio (TEL), which is a special purpose vehicle that was formed as part of the Joint Venture (JV) between Infinity and major Spanish construction and engineering group, Sacyr SA.

TEL has a Mining Licence Application (MLA) lodged with the Regional Government to create a vertically integrated mining and processing operation at San Jose which is targeting the production of battery-grade lithium products and will provide significant employment and economic benefits for the region.

Lithium Carbonate Feasibility Study Update

The JV developing San Jose remains committed to the current environmental permit process (AAU) and MLA as per the submission in Q4 2017, and the ongoing Feasibility Study (FS).  Continuing advancements in technical work towards the completion of the FS enables Infinity to earn a 75% interest in the project and for Sacyr/ Valoriza Mineria (VM) to then be a contributing partner for ongoing expenditure. Sacyr/ VM have the option to sell their remaining 25% stake to Infinity for an already agreed value or proceed in the JV with preferred contracting rights for construction.

Drilling and technical work (field) has now been completed.  As outlined previously, a range of smaller pit designs have been created based on improvements in geotechnical understanding and therefore steeper wall angles for final pit designs. These are being assessed and integrated into a financial model. Infinity is confident that it can imminently report a pit which is substantially smaller in total surface area of disturbance yet deliver materially comparable economic outcomes whilst not requiring re-lodgement or amendment of the Mining licence Application (MLA) currently under review.

The Lithium Market and Lithium Hydroxide

The challenges in the production of battery grade lithium chemicals were highlighted recently as market analysis focused on historical capacity projections, nameplate capacity and actual effective capacity.  Production facilities that were shut down in the 1990s have been recommissioned with additional capacity achieved through bolt-on expansions, leading to production issues and low recoverability against nameplate capacity.

San Jose is a fully integrated lithium project that benefits from the first generation of specialist lithium battery chemicals producer experience.  The project will have a purpose designed processing plant utilising one source of feedstock, ensuring cross contamination issues and control of throughput risks are mitigated from the project’s inception.  Infinity further benefits from a plant designed and constructed specifically for the production of battery grade lithium chemical products.  Wave International completed the lithium hydroxide (LiOH) option study for Infinity and have industry leading experience in the detailed engineering and design of the next generation of LiOH plants.

The importance of the ability to produce LiOH was reinforced at the 10^th Lithium Supply and Markets Conference (recently held in the USA) as attended by Infinity and major industry participants including cathode producers, battery manufacturers and electric vehicle (EV) manufacturers.  Several players are investing to transform Europe into a significant producer of lithium-ion batteries, and Infinity remains well positioned and has the flexibility to be able to meet the growing requirements to take advantage of the currently open window for strategic investment.

Managing Director and CEO, Adrian Byass commented "We can see the market aligning now with opportunities for companies to invest in projects globally. It is increasingly important to have flexibility in meeting market demands and to recognise the window for investment is open currently".

The availability of battery grade lithium chemical products remains in tight supply with many raw material suppliers investigating the viability of downstream processing facilities.  Infinity remains well placed as a fully integrated lithium project with key infrastructure located adjacent to the project area.

Lithium Hydroxide Option Study & Scoping Study

Infinity recently announced (ASX announcement 8^th June 2016) the outcome of a LiOH study to complement the existing lithium carbonate (Li₂CO₃) study at San Jose.  This study demonstrated that San Jose can produce LiOH if desired in response to evolving lithium-ion battery technologies.  Infinity expects to be in a position to progress the LiOH option study towards a LiOH scoping study to confirm the economic outcomes of the deviation in the process flow sheet in response to an evolving battery technology market. 

The LiOH opportunity has been progressed in direct response to potential strategic investment and offtake requirements, and reaffirmation through meetings at the 10^th Lithium Supply & Markets conference that customers in cathode production and battery manufacturing are increasingly requiring LiOH for lithium-ion batteries with greater energy densities and therefore greater ranges for electric vehicles.

Regional Investment

Infinity recognises significant opportunities in the Extremadura region.  The region’s status as a "priority objective" region in the European Union (under the current 2014-2020 Financial Framework) allows preferential access to structural funds in terms of employment and business competitiveness. The world class lithium resource, its proximity to key infrastructure (allowing the viable implementation of downstream processing), and regional government’s desire to attract investment to the region provide an attractive backdrop for cathode production, battery manufacturing or other industry that can benefit in a synergistic way from a strategic partnership with Infinity and the utilisation of high quality outputs from the San Jose project.

Summary

Drilling is finished at San Jose, the FS work is underway and progressing towards completion (and satisfaction of earn in provisions), noting that San Jose is being developed in a JV between Infinity and Sacyr/Valoriza Mineria. The project has a Mining Licence Application (MLA) lodged and being reviewed by the relevant regional authorities.

The FS is to produce battery grade lithium carbonate (Li₂CO₃) on site. Test work has also demonstrated there is flexibility to adapt to produce lithium hydroxide (LiOH) and respond to changing market conditions.

Technical work indicates that there is the potential to create a significantly smaller surface footprint impact and deliver materially comparable economic benefits and Infinity will update the market as to the next round of progress in the coming weeks.

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