Astute Metals (ASX:ASE) has decided to relinquish its Polaris and Altair projects after conducting a strategic review on its Nevada lithium assets.
The purpose of the strategic review has been to ensure that the company’s exploration portfolio is optimal.
Astute Metals, which has a market capitalisation of $13.99 million, says relinquishing Polaris and Altari allows the company to focus its resources and time on the projects that have the greatest potential, such as the Red Mountain Lithium Project which has recently emerged as a discovery of significance in North America.
On 7 August, the company confirmed multiple lithium zones across Red Mountain, after receiving assays from four drillholes.
The results included 1,120 parts per million lithium, which combined with previously reported results, indicate an “excellent” scale and grade potential.
The company adds that its Cobre Project, which also lies in north-eastern Nevada, US, is considered to have potential as being a “significant” lithium clay project and efforts are warranted to investigate opportunities to add to the project area, in order to make it into an economically viable project.
Chairman Tony Leibowitz says the regular evaluation of the company’s assets ensures that capital invested is directed to projects with the greatest potential.
“The optimisation of our North American lithium portfolio will allow management to focus on the Red Mountain Project, which has demonstrated scale and grade potential to become a lithium deposit of significance on the stage of emerging North American battery metals projects,” Leibowitz says.
Astute Metals notes the proposed impact of the impaired adjustment will be a decrease to the net profit before tax, totalling about $1.859 million.
As reported by the Department of Industry, Science and Resources’ (DISR) latest issue of its Resources and Energy Quarterly: June 2024, Australia’s lithium export earnings are projected to fall by more than half — from $20 billion in 2022-23 to $9.1 billion in 2025-26.
This fall is set to be driven by weaker lithium prices, which are anticipated to be partially offset by a 53% increase in Australia’s lithium mine production over the outlook period.
Meanwhile, global lithium demand is forecast to increase by 17% a year between 2023 to 2026, driven predominantly by the rising adoption of EVs. However, the DISR notes that weak Chinese demand and shifting policies in US and Europe could see EV sales growth remain slow.
Further, Astute Metals also reminds eligible shareholders that its one-for-four fully underwritten non-renounceable entitlement offer, seeking to raise $2.96 million, closes on 16 August 2024.
Funds raised from the entitlement offer will help progress several exploration activities across the company’s copper and lithium projects in Australia and the US.
Write to Aaliyah Rogan at Mining.com.au
Images: Astute Metals
