Guy Bourassa's Nemaska Lithium Inc. (NMX), down one-half cent to 16 cents on 4.01 million shares, says that "efforts to complete an optimized project financing structure continue." What it means, of course, is that Mr. Bourassa continues to frantically seek several hundred million dollars to resume work on its behind-schedule and well-over-budget Whabouchi lithium mine in Quebec. The original $500-million plan proposed in 2016 grew to an $800-million project at feasibility; it has since ballooned into a $1.27-billion boondoggle, thanks to a series of cost overruns that is forcing Nemaska to halt work and go cap in hand to Pallinghurst Group, which tentatively agreed to invest $600-million at 25 cents in the company.
Mr. Bourassa, president and chief executive officer, says that the company expects to hold a special meeting early next year to approve the Pallinghurst investment, which will result in massive dilution of current shareholders. "We continue working with Pallinghurst and our other strategic partners," he adds, to firm up the financing structure ahead of the proposed meeting. In the meantime, Nemaska Lithium is working hard to stop work -- temporarily, one hopes -- until the financing is in place and a revised construction schedule is confirmed.
Whabouchi hosts a reserve of 37 million tonnes at 1.4 per cent lithium oxide, enough to keep the proposed mine running for 33 years based on a 2,830-tonne-per-day operation at start-up and 3,660 tonnes per day after a planned expansion. Nemaska's stock traded as high as $2.44 early last year as construction got under way, but the realities of juniors building lithium mines have taken a toll.
Indeed, Quebec's first hardrock lithium mine, a $300-million operation built by RB Energy Inc. in the early 2010s never did get running properly and trying to fix the plant left the company bankrupt in 2014. North American Lithium Inc. wound up with the Quebec Lithium mine and got it running -- until February when it abruptly shuttered the operation and declared bankruptcy. At last report, Australia-based Sayona Mining Ltd. -- that's Sayona, not Sayonara, at least not yet -- was the only announced bidder for Quebec Lithium.
North American Lithium Inc. wound up with the Quebec Lithium mine and got it running -- until February when it abruptly shuttered the operation and declared bankruptcy. |
