As already informed NOWEA ENERGY INC. currently owns a 10% stake in a company, which itself owns roundabout 85% in a potential boron lithium mining project in Eastern Europe. With this corporate news we are pleased to present a brief summary of the news provided to us by the management of this company:
Evaluation of the Stage III Exploration Drillings as well of the Metallurgical Testing is nearly finished
In the ore body encountered, the minerals boron and lithium occur largely in separate layers. This allows for an efficient and simple process for mining and processing the ore. Currently, various tests are still underway to find the most optimal methode for processing. According to metallurgists, such a methode should be available by the end of the year.
"Clean & green european mining project"
The European Union has on its agenda that environmental issues will also play a strong role in the field of raw material extraction in the future. As a result, "sustainability" will become a major priority for mining projects, as in our case. In addition, the dependence on non-European raw material suppliers has to be significantly reduced. This project can fulfill both requirements of the European Union and therefore offers a great opportunity for the EU to achieve its goals. The start of production would significantly reduce the EU's dependence on imports for the raw materials boron and lithium.
Application for financing through the EIB
The mining company submitted a financing application to the European Investment Bank (EIB) earlier this month. Currently, the EIB is conducting a multi-stage intensive due diligence. The planned financing will be used, among other things, to implement the construction of the industrial pilot plant. The company intends to use this to further optimize the methode involved in the processing of lithium and boron and, above all, to increase the scaling effects in production. Due to the size of the ore body, important economic advantages are expected.
Market environment / initial talks with potential major customers
The market environment in connection with raw materials, especially with regard to lithium, is developing disproportionately positively in our view. The automotive industry is focusing very strongly on the electric drive and is meanwhile talking about the death of the combustion engine. For the first time in history, not a single new vehicle with an internal combustion engine was presented by exhibitors at one of the world's largest automotive trade shows (IAA in Munich).
VW AG, for example, is consistently focusing on electromobility and wants to become the world's largest manufacturer of electric vehicles. To achieve this goal, VW alone will need a large part of the world's lithium production. Automotive suppliers are also expanding their product ranges and are planning to enter battery production, for example (Robert Bosch AG).
In recent weeks, there have been initial constructive discussions between the management of the mining company and potential major customers with a positive response.
Raw material market for lithium
Since the beginning of the year, the price for lithium carbonate has moved strongly upwards (see https://tradingeconomics.com/commodity/lithium ). Currently, one ton of lithium carbonate pays about USD 26,000. This price increase has significantly increased the value of the deposit of our investment and it is expected that prices will continue to rise.
Conclusion and next steps
Recent developments and results have significantly exceeded our expectations. Currently, we can state that this resource deposit is one of the largest boron lithium ore bodies in Europe. The geology is promising and the extraction of the ore should be quite cost effective due to open-pit mining combined with economically favorable processing methods. This indicates that it will probably be possible to operate the mine at a lower cost than originally planned.
The expanded extent of the ore body on the one hand, with further increases in commodity prices on the other, will continue to have a significant positive impact on the value of our investment.
In the short term, further requirements for a "feasibility study" are to be met. This study will then form the basis for a "bankable feasibility study", which is required for the financing of the mine by a bank consortium.
We are currently evaluating various options to establish a fungibility of our asset for our shareholders. In intensive discussions with our advisors (M&A advisors, lawyers, tax advisors and auditors) we are currently working out together the tactically and strategically optimal implementation and necessary steps. At present, this is expected to be completed by the end of the first quarter next year.
We are very happy with the positive development of our investment.
Investor Relations / October 21, 2021