St George Mining (ASX: SGQ) has announced a $2 million strategic investment by Hongkong Xinwei Electronic Co., Limited, a wholly owned subsidiary of Sunwoda Electronic Co., Ltd, together with the signing of a non-binding memorandum of understanding that will consider partnering on a range of lithium-related business opportunities.
The MoU complements similar agreements St George has struck with global battery giant SVOLT Energy Technology and leading battery investor Shanghai Jayson New Energy Materials over the past month, underscoring market interest in St George’s flagship Mt Alexander project in Western Australia’s Goldfields.
The share placement to Sunwoda, which is globally recognised for its industry leading credentials in the design and manufacture of lithium-ion batteries, was priced at 8.6¢ per share, a premium to St George’s last close.
The Sunwoda news came as St George provided more positive news from the maiden lithium drilling campaign at Mt Alexander.
Drilling has indicated that outcropping lithium-bearing pegmatites continue below surface up to a vertical depth of at least 200m – with latest assays for rock chips also highlighting new broad areas of prospective fractionated pegmatite outcrop. In total, 20 drill holes (RC and diamond) intersected pegmatites with visual lithium-bearing minerals (laboratory assays pending), indicating a fertile lithium-mineral system along a strike of 1.7km.
Commenting on Sunwoda’s investment, St George executive chairman John Prineas said:
“We are delighted to welcome the Sunwoda Group – a global company at the forefront of the lithium-ion battery industry – as a new and significant shareholder in St George.
“This strategic investment recognises the exciting lithium opportunity at Mt Alexander and further highlights St George’s strong success in developing key industry relationships with some of the largest and most important global players in lithium-ion batteries.
“Our strategic relationship with Sunwoda will strengthen our ability to both advance Mt Alexander and to potentially generate and partner on additional lithium projects in Western Australia, which is the world’s best hard-rock lithium address.
“Lithium is a critical element required to underwrite the multi-decade energy transition that is underway, which we believe assures strong long-term demand for this commodity. The key downstream relationships forged by St George will boost our company’s capacity to continue our growth ambitions in the lithium sector.”
St George also confirmed that it expected a major drilling program of more than 20,000m at Mt Alexander next year, commencing as early as February.
“Our first-ever lithium targeted drilling at Mt Alexander was designed as an initial program to test for continuity below surface of the high-grade lithium bearing pegmatite outcrops confirmed by rock chip sampling,” Mr Prineas said.
“The drill program has successfully confirmed that these pegmatites continue below surface – in some cases up to 200m below surface. Lithium-bearing minerals have been logged in these pegmatite intersections with assays pending.
“These results continue to indicate the potential for a large lithium-bearing pegmatite mineral system at Mt Alexander, the full scope of which is still evolving as we continue work across the project.
“This is a great start to our lithium drilling campaign at Mt Alexander and we are excited about ramping up drilling and broader exploration activities in 2023 with more than 20,000m of drilling scheduled.
“There has been no previous systematic lithium exploration at Mt Alexander and we are delighted with the results of our work programs so far, which have quickly provided walk-up drill targets and confirmation of high-grade mineralisation starting from surface.
“With more than 13km of the pegmatite corridor yet to be effectively explored – and ongoing rock chip sampling confirming other areas of additional prospective pegmatites – we believe the exploration upside at Mt Alexander is significant.”