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André Dubuc
Press
From the pen of their lawyer, Pierre Gauthier, CEO of Central America Nickel, and Benoit La Salle, Chairman of the Board of SRG Mining, addressed Prime Minister François Legault and Minister of the Economy, Pierre Fitzgibbon.
“The whole process was marred by serious irregularities and the decision taken by IQ / Controller [RCGT] goes against the primary interests of Quebecers, writes Me Jacques Bouchard, from Gattuso Bourget Mazzone. Your intervention, in order to relaunch the process on a basis that respects the rules, is therefore desired. ”
Located at La Corne, 40 kilometers from Amos, the North America Lithium mine has a capacity of 180,000 tonnes of lithium or spodumene concentrates. What is called the first transformation of lithium.
In a second transformation, the spodumene becomes either lithium carbonate or lithium hydroxide, more complicated to make, but more efficient. Both products are used as inputs in electric vehicle batteries, but the hydroxide is used in higher quality batteries, used by Tesla, for example.
In operation from 2012 to 2014 and then from 2016 to 2019, the Abitibi mine has suffered in the past from the low price of lithium spodumene concentrate. The company, then Chinese-owned, thus placed itself under the protection of the Companies’ Creditors Arrangement Act in 2019. IQ was one of the secured creditors of Lithium North America. The controller is Raymond Chabot Grant Thornton.
“The key lies in the secondary transformation of lithium,” said the mayor of La Corne, Éric Comeau, over the phone. The mine has already employed 200 people.
Press joined the CEO of Central America Nickel, which has nickel projects in Guatemala. According to what Pierre Gauthier says, the process attracted six bidders. There were two left at the end, Sayona and him.
Gauthier complains that IQ preferred Sayona’s $ 60 million offer, less generous than his, to $ 169 million.
“We proposed a project with three sources of income: transformation of spodumene, but also nickel sulphate and the treatment of rare earths present in the lithium deposit”, describes Mr. Gauthier. He was supported by Prem Watsa of Fairfax.
Processing in the United States
He and Mr. La Salle criticize the fact that the processing of lithium concentrate will be done in the United States when they themselves proposed to do the processing in Quebec. Piedmont, a Sayona partner, has a project to manufacture 22,700 tonnes per year of lithium hydroxide in North Carolina.
Benoit La Salle’s SRG Mining project also consisted of investing, in addition to the purchase price, around 250 million to produce lithium hydroxide on the site. Deemed too low, his offer was rejected.
It is nonsense to let assets go to foreigners when you have the expertise in Quebec. The government must defend the export of spodumene and force the processing plant into lithium hydroxide.
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Benoit La Salle, Chairman of the Board of SRG Mining
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Economy Minister Pierre Fitzgibbon retorts that the agreement obliges Sayona to produce lithium hydroxide in Quebec within five years, otherwise a penalty will apply.
“I am very favorable to the offer of Sayona”, he assured in an interview at the end of the day Thursday. It underlines the synergy with the latter’s lithium project at La Motte, 60 kilometers from La Corne, if the operator obtains its environmental permits. “There will be a concentrator to make spodumene [pour deux mines] “, he said.
The Minister also underlines the importance of the American partner Piedmont, close to automotive suppliers. “We like the American partners. With the Buy American, we have to be very careful, ”he stressed.
In their complaint, MM. Gauthier and La Salle also denounce the fact that the McCarthy law firm represented both IQ and Sayona. “We are two Quebec companies who took steps for a year and we came to the same conclusion, that there was a lack of ethics and total transparency in the procedures that allowed Sayona to win. ”
Mr. Gauthier intends to present his arguments before the Superior Court judge who must authorize the agreement. “We are preparing the injunction,” said Mr. La Salle.
Who are the buyers?
Sayona Quebec, a subsidiary of Sayona Mining, a junior company from Australia, was created in 2016, following the acquisition of the Authier Lithium project in La Motte. Piedmont Lithium, owned by the NASDAQ listed company Piedmont Lithium Limited, has a project in North Carolina for the production of spodumene concentrate and the manufacture of lithium hydroxide. Piedmont Lithium owns 40% in Sayona Quebec.
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