Argosy Minerals becomes Argentina’s newest lithium producer

Argosy Minerals (ASX: AU) has produced battery quality lithium carbonate at its Rincon lithium project in Argentina’s Salta province.

The 99.76% lithium carbonate was produced as part of the commissioning phase of the 2,000 tonne per year lithium operation and the company says it plans to finish the ramp-up phase and achieve steady-state production by the end of the second quarter of fiscal 2023.

Australia-based Canaccord Genuity analysts Timothy Hoff, Reg Spencer and James Farr commented in a research note that the news “represents a significant validation of its production process” and “marks the transition of Argosy becoming a producer of lithium carbonate, one of only two ASX-listed companies to do so to date.”

They forecast Rincon will reach steady state production by the end of next year, and also noted that Rincon currently has no offtake agreements in place, “providing it access to spot markets.”

“While we have seen easing of pricing on futures exchanges inside China over recent weeks, the spot price as reported by Asian metals for 99.5% carbonate FOB [free on board] South America is currently sitting at US$67,350 per tonne…If we were to run a spot price of US$67,350/t as a scenario, our 2023E EBITDA [earnings before interest, taxes, depreciation and amortization] would lift 66% to A$83 million and our 2024E EBITDA would lift 117% to A$137 million.”

In addition to Rincon, Argosy owns the Tonopah lithium project in Nevada, U.S., about 4 km from Albemarle’s (NYSE: ALB) Silver Peak lithium brine operation, and 300 km from Tesla’s gigafactory.

Argosy acquired Tonopah in August 2019.