Cornerstone binding offtake agreement provides strong market validation of Anson Resource’s projects in the Paradox Basin in Utah
NEWPORT BEACH, CA / ACCESSWIRE / April 30, 2024 / Anson Resources Limited (ASX:ASN) is pleased to announce that it has completed negotiations with LG Energy Solution (KRX: 373220) and executed its first binding offtake term sheet to supply battery-grade lithium carbonate from its project in the Paradox Basin in southern Utah, USA.
The offtake term sheet calls for Anson to supply up to 4,000 dry metric tonnes per year of battery-grade lithium carbonate produced at the Project, which is expected to begin operations in 2027. The associated volumes represent approximately 40 percent of the Project’s start-up production capacity of 10,000 tonnes per year.
This cornerstone offtake agreement provides strong market validation of Anson’s project, 100% owned through its wholly owned US subsidiary, A1 Lithium Inc., and also demonstrates that it can produce high-quality product while maintaining its strong commitment to ESG standards. The Company is building a significant presence in the US market with continued growth through further investment in developing its Projects in the Paradox Basin.
This development is a significant strategic step for the onshoring and expansion of the domestic critical minerals supply chain that is key to li-ion battery manufacturers and hastened by the US Inflation Reduction Act (IRA). Korean and Japanese companies have committed to building large battery manufacturing facilities in the United States and are seeking IRA-compliant lithium to supply those projects. Anson is proud to be an important strategic partner in the growing US critical minerals supply chain.
LG Energy Solution is the ideal partner for Anson Resources, with its diversified customer base and strong investment in expanding production in North America. LG Energy Solution has eight facilities currently operating or under construction in North America, with stand-alone facilities in Michigan and Arizona and six joint venture facilities with major automakers.
Signing the binding term sheet with LG Energy Solution marks another key milestone for the Project following majority completion of all permitting and commissioning of the Company’s Sample Demonstration Plant. The term sheet or subsequent definitive agreement will become effective subject to A1 Lithium making a final investment decision and the start of commercial production. Anson continues to progress negotiations with other potential global customers.
The Paradox Basin is a globally significant lithium asset, on which the Company is conducting exploration and test work of the brine known to exist across multiple zones in the Paradox Basin. This work is on-going and if successful will support the Company’s theory that the Paradox Basin contains one of the largest lithium resources in North America.
Based on a definitive feasibility study (DFS) announced on September 8, 2022, phase one of the Company’s Project is forecast to produce 10,000 tonnes per year of battery-grade lithium carbonate. The Project also has world-class ESG credentials, thanks in part to the natural overpressure of the brine, meaning it is pushed to the surface without the need to pump.
Further, the Company employs the use of cutting-edge lithium extraction technology which use a fraction of the water needed for traditional hard rock or evaporation extraction methods.
Anson Resources CEO Bruce Richardson commented:
“Anson has recognized the unstoppable paradigm shift in the expanding US supply chain for electric vehicle battery materials, and the key role that Korean and Japanese battery manufacturers are playing*. The Inflation Reduction Act (IRA) along with other US policy initiatives have resulted in significant investment in new battery manufacturing capacity in North America to meet growth in demand for electric vehicles and the continued momentum toward the electrification of the economy in the US. This shift in investment has led to an increased demand for lithium produced in the US, not only to shorten supply chains geographically but also increase US content in li-ion batteries and electric vehicles, to meet IRA incentive requirements. Anson’s assets in the Paradox Basin in southern Utah are strategically positioned to benefit from these momentous trends. We are delighted to have reached agreement with LG Energy Solution allowing us to execute our first binding offtake term sheet for at least 40% of our production. This establishes the foundation for a long-term partnership and we are proud that we will be supplying US made lithium from the Paradox Basin to LG Energy Solution, a respected global leader in the lithium battery value chain, building out the largest battery manufacturing capacity in the US.”
