30 Sep Cornish Lithium taps local community for funding
UK lithium hopeful Cornish Lithium has used crowdfunding to finance its next phase of exploration, a move company CEO Jeremy Wrathall tells Mining Journal has helped build local support for the project.
Cornish Lithium used equity platform Crowdcube to raise £1.4m over the summer from 1,200 investors, many of whom the company says are based in Cornwall.
“We could have raised money from our original shareholders again, but we had had 600 people write in and ask to invest – a lot of them local. And we wanted to give them the opportunity to invest in a project that’s on their doorstep,” said Wrathall.
“Let’s say we continued to say to people: ‘no, you can’t invest in the project, we’re just going to keep it amongst international investors.’ Eventually there’s a frustration that builds where they actually want to invest in the project, and this gives them the mechanism to do so,” he continued.
Wrathall said he sees crowdfunding as a “really interesting possible new avenue” for funding mining projects “as long as it’s done carefully”.
“The most important thing is ‘Where is the crowd?’, and in this case it was a UK project and the crowd is in the UK. And the crowd is very interested in new technology relating to electric vehicles,” he said.
The past few weeks have not been encouraging for the UK mining sector, with Sirius Minerals running into trouble in its bid to secure financing for a fertilizer project in the north of England.
But Wrathall is unperturbed, largely, he says, because of the vastly differing funding requirements.
“Sirius is just this mind-boggling capex number which was going to hit roadblocks at some stage. It has, and I don’t think that is representative of the UK industry as a whole,” he said.
The Sirius project was expected to cost around $5 billion, while Wrathall expects his company’s plans to weigh in in the hundreds of millions, “but not many hundreds of millions”.
“Technology is moving rapidly in our favour. Companies like Lilac Solutions have developed new and [what is] looking like successful methods for extracting lithium from geothermal water very quickly and relatively cheaply.
“It’s difficult to judge how much your processing plant might cost […] If we’re talking hard rock lithium, we’re talking in that ballpark [of a few hundred million], but it’s not beyond the realms of the mining industry to finance that,” he said.
Wrathall says it is too early to say how the company will finance development further down the line, but one possibility is for a car manufacturer to step in.
“A lot of auto manufacturers are looking around and a lot of them are aware of the environmental issues that lithium extraction poses elsewhere, and obviously they want to make sure they’ve got as low a carbon footprint as possible,” he said.
This would have the added benefit of providing a cast iron customer base. These manufacturers would likely be UK or Europe-based, he said. The major selling point for UK lithium will be its carbon footprint.
Cornish Lithium is not alone in looking to develop a lithium supply chain in Europe. Savannah Resources is planning to build a lithium refinery in Portugal, although it has yet to line up funding.
But Cornish Lithium is still around five years from production – a timeline Wrathall believes could fit well with a potential lithium supply crunch. But considerable challenges will need to be overcome before then. In the near-term, Brexit looms over the UK economy, although Wrathall thinks his company can thrive regardless of what happens by the end of October deadline.
“I think strangely enough [Cornish Lithium is] a beneficiary of Brexit, because let’s say we do leave, we definitely need to find new industries in the UK,” said Wrathall.
Wrathall points to a number of UK government initiatives that he says suggests Westminster is eyeing electric vehicles as an important element in the country’s industrial future.
“The government has put money behind it with the Faraday battery challenge, which is £248m so far. So it is a hot topic. And the thing we’ve been saying to government is that if you’ve got it on your doorstep you should at least have a look to see if there’s a lithium source across the UK,” he said.
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