Every reporter: Xu Shuai Every editor: Wen Duo
There is new news regarding the supply of lithium resources of Yahua Group (002497, SZ).
On the evening of February 16, Yahua Group announced that at present, the Australian Core Company has started the mine construction as planned, and it is expected to provide the company with lithium concentrate in the fourth quarter of this year according to the agreement. On the same day, Yahua International Investment and Development Co., Ltd. (hereinfollowing referred to as “Yahua International”), a subsidiary of the listed company, signed a supplementary agreement to the Offtake Agreement with a wholly-owned subsidiary of Core Corporation of Australia. The reference price and maximum price have been adjusted, and the relevant terms of delivery of products at FOB prices have been re-agreed. In the future, if Core Australia intends to expand the production of the project and have additional products to sell to Yahua International, the two parties will further discuss the sale and purchase agreement for additional products.
Supplying mines to ensure upstream resources
Yahua Group announced that on February 16, 2022, Lithium Developments (Grants NT) Pty Ltd (Lithium Developments (Grants NT) Pty Ltd, hereinfollowing referred to as Yahua International, a wholly-owned subsidiary of Australia Core Company “Lithium Industry Development”) signed a supplementary agreement to the Offtake Agreement, which adjusted the reference price and maximum price of lithium concentrate in the original agreement, and re-agreed on the terms of delivery of products at FOB prices. .
In the future, if Core Australia intends to expand the production of the project and have additional products to sell to Yahua International, the two parties will further discuss the sale and purchase agreement for additional products.
At present, Core Australia has started mine construction as planned, and is expected to provide the company with lithium concentrate in the fourth quarter of this year according to the agreement.
Core Australia is a joint stock company of Yahua Group. In December 2017, the company has completed the two-phase subscription of Core Company with a total of 33.4 million shares and obtained share certificates. The company holds regarding 10.06% of Core’s existing share capital.
On March 29, 2019, Yahua International and Lithium Development signed the “Offtake Agreement” on lithium concentrate. The two parties agreed that Yahua International would purchase at least 300,000 dry tons of lithium oxide concentrate of regarding 6% from Lithium Development. Yahua International will purchase at least 75,000 dry tons (plus or minus 10%) of lithium oxide concentrate every year following the lithium deposit begins to be put into production. According to the agreement at that time, before November 30 every year, Yahua International and Lithium Development will hold meetings and negotiations to determine the price of lithium concentrate and the price period.
Yahua Group said that the adjustment of the highest price has given the company a greater cost advantage for some of its lithium concentrates. With the successive output of Core’s lithium concentrates, it will open up another stable supply channel for the company’s raw materials. The company will continue to deploy upstream lithium resources to enhance the resource guarantee capability for future lithium salt production capacity expansion.
Recently, Yahua Group’s share price has also shown a steady trend.
Mining supply information has been mentioned in previous institutional research
It should be noted that the news that “Australian Core has started mine construction as planned and is expected to provide the company with lithium concentrate as agreed in the agreement in the fourth quarter of this year” did not come until the 16th.
When receiving institutional research before, Yahua Group’s institutional survey summary mentioned this matter.
For example, on January 18 this year, Yahua Group mentioned in an investigation conducted by China Gold Nonferrous Metals and other institutions that it has participated in Core Company and signed an underwriting agreement for lithium concentrate. Core has now started mine construction, and its lithium mines have low mining costs and high mining value. Higher, lithium concentrate is expected to be available in the fourth quarter of this year.
On December 30 last year, Yahua Group also mentioned this matter when it was surveyed by Zhongtai Securities.
The guarantee of lithium resources has always been a concern of institutions when investigating Yahua Group. In response to the agency’s question, Yahua Group said that the company reserves lithium resources through various channels, and the existing supply channels of lithium resources can meet the production needs of lithium salts in 2022.
For example, renew the lithium concentrate underwriting agreement with Galaxy Lithium until 2025. Yinhe Lithium provides a supply of no less than 120,000 tons of lithium concentrate every year according to the production needs of the listed company, which will provide long-term, stable and high-quality raw material guarantee for the company’s future production of lithium salt products;
At the same time, it has a 5.01% stake in Eastern Australia Resources Company, and has signed a strategic cooperation agreement. The company has locked the lithium ore target with Eastern Resources Company and will continue to cooperate in the development of lithium ore resources.
In addition, the company is also continuing to follow up other domestic and foreign lithium mine and salt lake projects, and actively deploy upstream lithium resources.
With the emphasis on capital expenditure, the search for some potential lithium resources is also underway. Recently, the research team of the Qinghai-Tibet Plateau Scientific Expedition from the Institute of Geology and Geophysics of the Chinese Academy of Sciences discovered a super-large lithium ore, which is considered to be “the third largest lithium ore in my country”.
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