Lithium Australia will focus on ramping up revenues from its Envirostream battery recycling plant in Melbourne whilst implementing targeted austerity measures to preserve as much of its $3.3m cash balance as it can throughout the global COVID-19 crisis. The company also said it is expecting Soluna Australia to generate revenues from battery sales during the current quarter whilst exploration and technology development expenditures will be deferred.
Management said its plan to focus on elements of its business that can generate revenues in the near term whilst deferring spending on cash-gobbling items such as research and development and in particular on exploration, should help the company to preserve its $3.3m bank balance lifeline as the Coronavirus ravages public markets.
This is likely to impact its Medcalf spodumene deposit near Lake Johnston in Western Australia where the company had earlier identified strongly mineralised, lithium-bearing pegmatite swarms. Lithium Australia’s technical team interpreted an exploration target back in April last year at Medcalf that it said had a potential volume of between 5Mt and 8Mt of mineralised rock containing 0.8-1.2 per cent lithium oxide.
Lithium Australia upped its ownership in Envirostream, a battery recycling business, to 90 per cent in February this year after the second shipment of mixed metal dust left its recently expanded recycling plant in Campbellfield, Victoria.
The mixed metal dust product from the plant is a cocktail of lucrative minerals recovered from the recycling of lithium-ion batteries. The minerals and metals recovered include cobalt, nickel, lithium and graphite.
Late last year, the Perth-based company joined forces with Chinese firm, DLG Group, forming a 50:50 incorporated joint venture to be known as Soluna Australia Pty Ltd that will sell lithium-ion battery and energy storage products as it seeks to disrupt the rapidly expanding Australian renewables market.
The company said sales revenues from the marketing of batteries by its team here in Australia are expected to commence this quarter.
Other cost-reduction measures include the company’s board taking half its board fees in shares, employees taking on reduced hours and some employees sacrificing salary for shares in the company. Management has reduced rental costs across both offices and factory spaces and is accessing Federal Government subsidies that are available during this turbulent period.
Lithium Australia Managing Director, Adrian Griffin said:
"We at Lithium Australia are deeply concerned for the health and well-being of Group employees, as well as their families, dependents and friends, in these difficult times. We encourage everyone to show concern for others and act with caution regarding their own exposure to COVID-19. Let’s all hope for a speedy global recovery from the pandemic, for resumption of normal life as soon as possible and for the continued success of our business, for the benefit of all stakeholders."
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