Flash | 16 Oct 2025 10:30:46 ET │ 9 pages China Battery Materials +852-2501-2739 anna.d.wang@citi.com Jimmy Feng Lithium into 3rd week of Oct – Lithium inventory re-validates robust battery demand CITI'S TAKE SMM weekly dataset suggests that weekly lithium output was up by 2%, within that brine-based lithium output increased by 7% WoW on Zangge's brine resumption, and weekly lithium inventory was down by 2% WoW. We also notice that the 12,213 units of lithium warehouse receipt ("仓单") in GFEX were cancelled ...

Core Viewpoint - The U.S. government's recent equity stakes in publicly traded companies, particularly under the Trump administration, set a potentially dangerous precedent for Wall Street and investors, raising concerns about conflicts of interest and market manipulation [4][12][14]. Group 1: Government Investments - The Trump administration has taken equity stakes in four public companies: Intel, MP Materials, Lithium Americas, and Trilogy Metals, without a financial emergency, which is unprecedented [4][5]. - The investment in Intel amounts to $8.9 billion, representing a 9.9% stake, with additional warrants allowing for further investment [5][6]. - The Department of Defense (DOD) has made significant investments in MP Materials, establishing it as the largest shareholder and securing a 10-year offtake agreement for magnets produced at a new facility [7][8]. - The Department of Energy (DOE) has taken a 5% stake in Lithium Americas, which operates a major lithium mine, and in a joint venture with General Motors [9]. - Trilogy Metals received a $35.6 million investment from the DOD, with the government purchasing over 8.2 million shares [10][11]. Group 2: Market Implications - The government's involvement in these companies may create a perception of confidence in the semiconductor and rare-earth metals industries, but it also raises concerns about the implications for market dynamics and investor trust [12][18]. - The investments have led to significant stock price increases for the involved companies, but this may not reflect genuine market demand or need for capital [17][18]. - The potential for conflicts of interest is heightened, as government officials may influence company decisions while holding equity stakes, undermining the principles of fair market competition [14][15][16].

Core Insights - ExGen Resources Inc. has signed a binding letter of intent to acquire three lithium properties in Nevada, significantly expanding its lithium interests in the region [1][3][7] - The acquisition includes the Spark South property, adjacent to Surge Battery Metals Inc.'s Nevada North Lithium Project, which is known for its high-grade lithium resources [1][4][7] - The deal also encompasses the Libra and Augusta lithium projects, providing exposure to additional lithium districts in Nevada [3][11] Company Overview - ExGen Resources Inc. is focused on accelerating project development through joint ventures and partnerships, aiming to reduce technical and financial risks while maintaining upside potential [9] - The company currently holds seven projects across Canada and the U.S., with a strategic emphasis on lithium resources in Nevada [9] Acquisition Details - The Binding LOI involves acquiring the Spark South property (409 claims), Libra lithium project (107 claims), and Augusta lithium project (32 claims), along with a 1.5% NSR on mineral production from 111 claims [3][11] - ExGen will issue 21 million shares to the vendors, with 18 million shares distributed to the vendor's shareholders post-closing, and a cash payment of CAD $125,000 [11][12] Market Context - The lithium sector in Nevada has gained significant investor interest, particularly due to developments like Lithium Americas Corp.'s Thacker Pass project [2][7] - ExGen's CEO believes that the Elko County lithium district represents one of the highest-grade lithium opportunities in North America, with potential for significant industry development [6][7]

Core Viewpoint - Standard Lithium is raising funds through an equity sale, resulting in shareholder dilution, but this move is deemed necessary for the company's operational funding [1][4]. Group 1: Fundraising and Stock Performance - Standard Lithium announced the sale of nearly 30 million shares at $4.35 per share, totaling approximately $130 million, which is a significant discount from the previous closing price of $5.39 per share [3]. - Following the announcement, Standard Lithium's stock experienced a decline of 27.9%, trading below the discounted price offered to underwriters' clients [1][3]. - The company's stock had previously surged due to government interest in boosting domestic sources of critical materials, particularly after the Department of Energy's announcement regarding a 5% equity stake in Lithium Americas [2]. Group 2: Financial Position and Operational Phase - At the end of the second quarter, Standard Lithium had only $33 million in cash, indicating a need for additional funding to support its operations [4]. - The company is currently in a "pre-commercial" and "pre-revenue" phase, making it likely that it would need to raise capital to fund its mining activities [4][5]. Group 3: Strategic Importance and Market Context - Standard Lithium is considered a strategic asset in the context of U.S. efforts to reduce reliance on China for critical materials, aligning with broader government initiatives [6]. - The stock has seen significant appreciation this year, driven by speculative interest rather than fundamental factors, which raises concerns about the sustainability of its high valuation [7].

Core Viewpoint - Standard Lithium Ltd. announced a public offering of common shares amounting to $120 million, subject to market conditions and other factors [1] Group 1: Offering Details - The company plans to grant underwriters a 30-day option to purchase an additional 15% of the common shares sold under the offering at the public offering price [1] - Morgan Stanley and Evercore ISI will act as co-lead book-running managers for the offering, with BMO Capital Markets also participating [2] - The net proceeds from the offering will be used for capital expenditures at the South West Arkansas Project and the Franklin Project in East Texas, as well as for working capital and general corporate purposes [2] Group 2: Regulatory Filings - The company filed a preliminary prospectus supplement with securities commissions in all Canadian provinces and territories except Quebec, as well as a preliminary prospectus supplement in the United States [3] - The offering is being made in the United States and in each of the provinces and territories of Canada, excluding Quebec [4] Group 3: Company Overview - Standard Lithium is focused on the sustainable development of high-grade lithium-brine properties in the United States, aiming for commercial-scale lithium production through a Direct Lithium Extraction process [6] - The company's flagship projects are located in the Smackover Formation in Arkansas and Texas, with a partnership with Equinor for the South West Arkansas project [7]

Core Viewpoint - Standard Lithium's shares surged significantly, increasing by 25% in early trading and maintaining a 15% rise later in the morning, driven by a major milestone in its pre-production phase rather than external factors like tariffs or lithium prices [1]. Group 1: Company Progress - Standard Lithium is in the pre-production stage, focusing on projects in the lithium-brine-rich Smackover Formation, particularly in South-West Arkansas and East Texas [3][4]. - The company has filed a definitive feasibility study (DFS) for its South-West Arkansas project, indicating an annual production capacity of 22,500 tonnes of battery-grade lithium carbonate over a 20-year lifespan [4][5]. - The DFS confirms the commercial viability of the SWA project, allowing Standard Lithium to proceed to the next stage of raising funds for production [5]. Group 2: Timeline and Future Expectations - Standard Lithium estimates a 34-month timeline from construction to the start of commercial operations, with the earliest expected production date around the end of 2028 if construction begins in early 2026 [7]. - The company's stock has seen significant growth, doubling in value over the past month and increasing over 300% in 2025, largely due to speculation regarding a potential U.S. government stake [9][8].

Core Insights - The Tonopah Flats Lithium Project (TFLP) has demonstrated strong economic potential with a 21.8% Internal Rate of Return (IRR) and a Net Present Value (NPV) of $2.57 billion at an 8% discount rate, reinforcing its strategic importance in the U.S. lithium supply chain [1][3][10] Project Overview - The TFLP is located near Tonopah, Nevada, and is designed to produce 30,000 tonnes per year of lithium hydroxide monohydrate (LHM) over a 45-year mine life [3][6] - The project utilizes innovative processing techniques that reduce production costs to $4,307 per tonne of LHM, a 9.2% decrease from previous assessments [3][11] Resource and Reserve Estimates - The project has seen a 53% increase in Measured and Indicated Resources, totaling 15.78 million tonnes, and an 11% increase in total lithium resources compared to the April 2024 Initial Assessment [5][12] - Proven and probable reserves have been established at 2.73 million tonnes of LHM, confirming the project's economic viability [5][15] Financial Metrics - The project has an after-tax NPV of $2.57 billion and a payback period of 7.5 years from the initial investment [3][11] - The average LHM price is projected at $23,000 per tonne, indicating a favorable market environment for the project's output [11] Permitting and Development - The TFLP has been selected for streamlined permitting under the FAST-41 initiative, expediting the approval process for construction and operation [3][4] - The company has completed all required NEPA Baseline Reports and submitted a comprehensive Mine Plan of Operations, which are currently under review [3][4] Future Steps - The company plans to proceed with a Definitive Feasibility Study (DFS) to further de-risk the project and refine engineering and cost estimates, with an estimated cost of $5.8 million to $6.8 million [17][20] - Key future activities include continued engagement with local utilities for power infrastructure and community engagement to ensure mutual benefits [20]

Core Insights - LiFT Power Ltd. announced the results of exploration activities at the Cali Lithium Project, indicating significant progress in understanding the project's economic potential [1][21] - The exploration program in 2025 builds on previous work, focusing on systematic channel sampling and mapping to gather data on lithium grades and metallurgical recovery [3][19] Group 1: Project Overview - The Cali Lithium Project is located in the Northwest Territories, Canada, within the Little Nahanni Pegmatite Group, featuring a 13 km long corridor of spodumene pegmatite dykes [2][21] - In 2023, geological mapping and sampling were conducted, identifying a strong spodumene mineralization area of approximately 1 km by 1.5 km [2][10] Group 2: 2025 Exploration Results - A total of 43 rock samples were collected in 2025, with 24 channels cut, yielding 187 one-metre samples, and channel samples were taken from both outcrop and frost-shattered subcrop [9][10] - The 2025 work area showed promising results, with 17 out of 19 channels returning grades above 0.8% Li₂O, including a highlight of 1.9% Li₂O over 21 consecutive metres [10][19] Group 3: New Discoveries - The exploration confirmed six new spodumene-bearing pegmatites in the northwest extension, adding 3 km to the previously defined corridor, with a minimum width of 400 m [12][19] - In the NW-01 area, 23 out of 34 rock samples returned grades above 1.0% Li₂O, with a peak grade of 2.9% Li₂O [13][19] Group 4: Future Plans - The company aims to integrate channeling, metallurgical testing, and extensive prospecting to advance the understanding of the Cali Lithium Project and position it for potential future resource delineation [19][21]

Company Updates - Meeka Metals (ASX:MEK) has reported new gold hits at its flagship project, including a notable result of 22m @ 3.25g/t gold from a previously undrilled area, and has produced more gold in the September quarter than initially expected [4] - European Lithium (ASX:EUR) has announced a trading halt as it plans a "major divestment" of its shares in NASDAQ-listed Critical Metals Corp [4] - Power Minerals (ASX:PNN) has been engaged by Kevin Rudd, acting as an Ambassador for Australia, in anticipation of a meeting with Donald Trump [4] - American West Metals (ASX:AW1) has initiated a placement to secure funding for operations aimed at establishing America's largest indium deposit, highlighting the growing interest in critical metals [4] - Resolution Minerals (ASX:RML) has responded to an inquiry from the ASX following recent price volatility [4]

Core Insights - Imagine Lithium Inc. has reported significant technical milestones at its 100%-owned Jackpot Lithium Project, indicating strong potential for the project as an open-pit, hard-rock lithium deposit [1] Resource Highlights - The NI 43-101 compliant Mineral Resource Estimate (MRE) outlines two conceptual pit shells, Jackpot and Casino Royale, both showing good grade continuity and strong potential for resource expansion [3] - The Indicated Resource is 3.1 million tonnes grading 0.85% Li₂O, containing 26,200 tonnes of Li₂O, while the Inferred Resource is 5.3 million tonnes grading 0.91% Li₂O, containing 49,500 tonnes of Li₂O [7] Metallurgical Test Work - Early metallurgical results indicate that Jackpot mineralization can produce a high-grade spodumene concentrate suitable for the lithium battery supply chain, with a recovery rate of 81.5% Li₂O based on SGS metallurgical testing [4][8] Recent Surface Exploration Programs - A series of surface exploration programs have refined targets across the Jackpot property, including diamond drilling that intersected 0.92% Li₂O over 35.10 meters in hole JP-24-31 [5] - Continuous channel sampling returned exceptional results, including 65.10 meters at 1.10% Li₂O, confirming excellent surface continuity along multiple dykes [11] - Geological mapping and sampling have identified six new spodumene-bearing pegmatite zones outside the current resource pit shells, which remain untested by drilling [11] Upcoming Exploration Program and Next Steps - An aggressive 2026 exploration program is planned to expand known mineralization and test newly identified targets, including resource expansion drilling and geological mapping [19]