Lithium Africa’s flagship is the Springbok project in South Africa’s Northern Cape, roughly 80 km north of the town of Springbok near the Orange River and the Namibian border, where they are drilling LCT pegmatites for spodumene. Beyond that they hold early stage lithium ground across several countries, most of it in a 50/50 joint venture with Ganfeng Lithium. The talk covered the drill program at Springbok, a historic stockpile they are trying to sell, the Ganfeng partnership, treasury, and jurisdiction risk.
TL;DR
Tom Benson came in as CEO about a month ago after a technical career at Lithium Americas and Lithium Argentina, and he says he is all in on this one. Springbok was picked up out of a distressed situation for about $4 million payable over two years, and it came with a 5 hectare mining permit, a 30,000 tonne historic stockpile reported at 1.6% Li2O, and a large pegmatite field. They are drilling 3,500 metres now, 1,500 diamond and 2,000 RC, with 80% of the metres inside the small mining right where they want an NI 43-101 resource. They have a bit over C$6 million in the bank with the drill programs already paid for, and they are running a sale process on the stockpile which Benson benchmarks at roughly $4.2 million using Sigma Lithium’s reported sale of about 1% fines at $140 per tonne. Assays from Springbok are expected late this quarter or early next.
What have they done for shareholders lately?
The concrete stuff is mostly ground work and paperwork. They closed the Section 11 consent about two weeks before we spoke, which transferred majority ownership to them and, according to Benson, left them with no residual liabilities from the previous operator. During due diligence they used a calibrated handheld LIBS unit and XRF, targeting mica and feldspar chemistry rather than lithium directly, and say they identified 30 new spodumene bearing pegmatites in 30 days, taking the count to over 40 along a trend of more than 50 km. They did detailed structural mapping and high resolution drone topography, which they say shows the pegmatites dip north rather than south as previous operators assumed. Two rigs are turning at Springbok, they are about 400 metres into the diamond program, and no samples have been shipped yet because they were waiting on a core cutting machine. A separate 2,000 metre program in Côte d’Ivoire is about halfway done and paused for the rainy season, with first assays coming back now.
How much money do they have and what are they spending it on?
They raised about $8.8 million in March at $2.00 per share, led by Purpose Investments, and they now hold a little over C$6 million, which Benson says is on top of drill programs that are already paid for. Monthly burn is roughly $200,000 to $300,000 including exploration. The stock is around $1.43 against a $2.00 go public price, with about 25 million shares out, 33.6 million fully diluted, 3.7 million options and 5 million warrants making up roughly 26% of the fully diluted count, and a market cap around $36 million. The 3,500 metre Springbok program is on the order of $400,000, with the Côte d’Ivoire program costing them less than half of that because Ganfeng funds 50% inside the JV. Diamond drilling in South Africa runs about $160 per metre. Marketing spend is described as small, mostly conferences and online interviews. On ownership, reporting insiders are capped at about 10%, broader management is around 16%, Ganfeng holds 13.2%, Purpose is at 9.9%, the old shell holders are around 8%, and other institutional and retail is roughly 45%. Founders paper was issued at 20 cents. Benson’s own position is 50,000 shares, just under 100,000 options, 250,000 RSUs granted, and another 750,000 RSUs pending AGM approval, and he said he intends to buy in the open market outside blackout periods.
Upcoming catalysts
Benson named three. Corporate: the sale of the 30,000 tonne stockpile, targeted this quarter with possible slip into early next quarter, but stated as happening this year. Technical: drill results from Springbok, with first assays expected late this quarter or early next quarter, sent to SGS Johannesburg on a two to three week turnaround and released in batches. Technical: drill results from the Zoe project in Côte d’Ivoire, expected in the coming weeks to a month. He also mentioned that KPIs and a bonus structure for management, plus his own RSU grant, are to be approved at the AGM in a few weeks, and that a mining right renewal application will be submitted.
Risks
The one the CEO named first is political. They hold ground in Mali where an insurgency is active, so those projects are on care and maintenance with only minimum spend to keep licences in good standing, and that capital has been redirected to Côte d’Ivoire. The second is resource nationalism, with Zimbabwe’s ban on direct shipping ore given as the case study. Beyond what he said, a few things are worth watching. The stockpile is central to the funding story but no sale is signed, no price is agreed, and the historic DMS test work produced only about a 4.9% Li2O concentrate, which he did not directly address beyond saying they have done additional test work he cannot discuss. The mining permit needs renewal, and while he says the strategy is in place, no deadline was given.
Lithium Africa CEO Interview
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