Transcription of The Stock Network Interview with Chariot Corporation (ASX:CC9) Executive Chairman and Managing Director, Shanthar Pathmanathan
Lel Smits: Chariot Corporation is a mineral exploration company focused on its recently acquired portfolio of four lithium projects in Nigeria. The group’s Nigerian tenure consists of eight exploration licences and two small-scale mining licences with a history of past production. Chariot Corporation Executive Chairman and Managing Director Shanthar Pathmanathan joins me to discuss the company’s upcoming plans. Shanthar, welcome back to the Stock Network.
Shanthar Pathmanathan: Thank you, Lel. Pleasure to be here.
Lel Smits: Now, you recently acquired a 66.7% interest in one of the largest hard rock lithium portfolios in Nigeria. Can you tell us about the exploration tenure here?
Shanthar Pathmanathan: Sure. Lel, I believe this to be a landmark transaction in the Australian resources sector. We have entered into probably the hottest lithium region in the world. The Chinese lithium companies are making an exception and looking at this area over others at the moment, Gangfeng in particular. So, we’ve acquired a stake of 66.67% in four of the largest undrilled hard rock lithium spodumene-bearing deposits in Nigeria, in the southwest of Nigeria, about 150 kilometres to 400 kilometres from port, depending on which project.
So, what the geology looks like today is a series of artisanal pits, trenches, workings. These projects are in production on an artisanal basis. They’re all undrilled.
These workings at each of the projects strike over a distance of a kilometre up to five kilometres with one of the projects. So, potentially very large systems. And what we can see is, if you imagine sort of a candle holder with the candles, candlelight at the top, we can see the candlelight.
We don’t know what the rest of the candle holder looks like. If you imagine sort of a menorah-type candle holder. And so, drilling will unveil all of that.
At the moment, we can just see the candle lights and through these artisanal pits. The geology is virtually identical to Sigma Lithium’s property in Brazil and the Lithium Valley deposits, including what Pilbara’s got over there. Those are very high-grade deposits.
The Brazil and Nigeria geology was once upon a time, 500 million years ago, connected. And then when these deposits were formed about 500 million years ago, about 120 million years ago, the two continents separated. It was called the South Atlantic Rift, through which the Atlantic Ocean was formed.
So, what we’re dealing with is the same geology as what people have seen and had some success with in Brazil. We are now focused on Nigeria, as is many players in the Lithium market.
Lel Smits: Excellent. Well, if we can take a look now, maybe at past production, also some near-term revenue opportunities, the Nigerian portfolio has delivered several thousand tonnes of spodumene concentrate exports in the last few years. Can you outline how this creates a revenue opportunity for the company?
Shanthar Pathmanathan: Yeah. So, nothing’s been finalised. I should caution with that, Lel. However, all of the properties were in production. The artisanal miners with the uptick in the spodumene price back up close to $1,000 a tonne.
Just for everyone’s reference, it was lowest about $600 a tonne and it peaked at $8,000 a tonne in 2022. So, we’re now back close to $1,000 a tonne. At that point, artisanal mining starts to become economic again and we understand that the artisanal miners, who are the local people, the farmers in the rural communities, have started going and working the rocks again.
So, these properties have been in production. We will be looking to bring them back into artisanal production. We will be working with our partner, Continental Lithium in Nigeria.
There’s a process for bringing the properties back into artisanal production. We’ll have to work with the local governments, the federal government and with the local mining cooperatives as well. And essentially, we’ll be buying the ore from the local artisanal miners and then, through various means, selling it into the Chinese market.
We are hashing out the terms of an agreement on that front with Continental Lithium so that Chariot, as a 66.67% shareholder of the joint venture company, can participate in that artisanal revenue. So, I think as and when things are finalised, we’ll make announcements to the market.
Lel Smits: Excellent and finally, Shantar, you also recently secured $1.6 million in funding through a placement backed by strategic and long-term lithium investors. What will these funds be allocated towards?
Shanthar Pathmanathan: Sure. So, the funds were mainly to bed down the Nigeria acquisition and to pay for annual holding costs in the United States.
So, I see Nigeria to China as the inside lane in lithium right now. However, we have a very strong outlook for the US market being one of the largest car markets on the planet. So, that to us is the outside lane in lithium.
It’ll take a little bit longer, but highly strategic. So, we’ve just paid close to half a million US dollars to bed down that portfolio, i.e. the annual fees that we paid to the federal government in the United States for that large land position. We do have some funds remaining and that’ll be dedicated towards two things.
So, the two activities that we will focus on that investors will hear about will be the artisanal mining, activating that in Nigeria, one, which I just spoke about, and number two, drilling out a large-scale resource in Nigeria. On both fronts, we are now talking to Chinese partners, big companies, battery companies listed on the Hong Kong exchange. And those companies will most likely contribute towards the exploration work we will do at the Nigerian properties.
So, to the extent possible, we want the cost of the exploration to be non-diluted to chariot. But at this stage, these are the conversations that are happening. The planning for the exploration, Brendan Borg has joined as a non-executive director.
He recently sold, sorry, he’s part of Leo Lithium, which has sold a 45% interest in the Gulamina project to Gang Feng for north of US$340 million. So, he’s had some success there in taking the lithium project in West Africa up the curve to a sale of that project at a decent price. He’s getting involved and he’s going to be instrumental in planning the exploration program.
So, what we’re targeting is to drill something like a Pilbara Minerals or a Sigma Lithium type deposit, Pilgangura for Pilbara. And so, plenty of news in terms of drilling plans and activity to come, Lel.
Lel Smits: Well, Shanthar, thank you for the update on Chariot Corporation today. Look forward to seeing that news as it comes through.
Shanthar Pathmanathan: Thank you, Lel. Pleasure.
Ends