- New FMG-backed lithium IPO Lightning Minerals is prospecting for the hot commodity near Liontown Resources’ Buldania deposit
- Led by former Critical Resources chief Alex Biggs, the company is chasing $4.5 million to $7 million in a PAC Partners-led procurement
- Battery metals have dominated the 2022 resource IPO landscape
Tattarang, the private investment vehicle of iron ore squillionaire Andrew Forrest, has spent hundreds of millions of dollars through its mining arm Wyloo Metals to fund investments in nickel and rare earths, some of the most-sought-after commodities for transportation electrification.
It’s a theme that has dominated the investment narrative in 2022 alongside a fossil fuel supply shortage.
While Wyloo has traversed diversified territory for Forrest’s resource empire, his main game Fortescue Metals Group (ASX:FMG), where the big man has just returned as CEO, has been a little gun-shy.
It plans, of course, to spend billions through its green energy arm, Fortescue Future Industries, on much crazier and more wonderful things like commercial-scale green hydrogen.
But from a mining perspective, aside from a few smaller copper exploration leases in South Australia and South America, FMG has been an iron ore playground.
You’ll be interested to hear that it’s dipping its toes into lithium, not just as a miner like bigger rival Rio Tinto (ASX:RIO), but by selling some ground that it sold near Norseman a few years ago for a IPO hopeful Lightning Minerals.
Depending on the IPO subscriptions, FMG will hold around 3% of the company.
The right zip code?
Lightning, which filed its prospectus with ASIC last week, and lead manager PAC Partners are chasing between $4.5 million and $7 million from investors at 20 cents apiece to take the company public.
It will be the latest of many. Battery metals, normally swamped with gold juniors, have become the dominant IPO class in 2022 as lithium prices have skyrocketed.
For example, as many as 16 of the 29 commodities companies that went public in the June quarter were looking for EV metals.
Spot prices for spodumene are above US$7,000/t according to analysis by at least one price agency, with lithium chemical prices in China above the critical RMB500,000/t level that is putting Chinese regulators under severe pressure.
That’s over US$70,000/t in more frequently quoted numbers, more than three times what it was a year ago.
These properties, which FMG subsidiary FMG Resources — secretly a major property owner in the eastern goldfields, although Pilbara is the primary focus of their parent company — are selling on the float are known as the Dundas Project and cover approximately 450 square kilometers between 35 km to the northeast and 105 km northeast of it Vikings.
Geologically, the project is a $3.3 billion nearology perfect nearology project for Buldania from Liontown Resources (ASX:LTR).
This included Anna pegmatite, where LTR has outlined a spodumene resource of 14.9 Mt grading 1% Li2O (lithium oxide or lithia).
Also in close proximity to properties to the northeast of the package is the Bald Hill lithium and tantalum project, an abandoned spodumene asset containing 26.5 Mt @ 1% Li2O and 149 ppm tantalum pentoxide with additional tantalum resources of 4.4 Mt to 336 Ta2O5.
Traditionally considered gold country since 1893, according to Lightning, previous exploration has focused on nickel, gold and to a lesser extent copper and PGEs, although pegmatite veins have been identified within and adjacent to the Dundas project.
While Lithium will be the main game, with Dundas receiving around 60% of Lightning’s engineering budget, it also features projects with gold and base metal potential at Mount Jewell, 55km north of Kalgoorlie, Mailman Hill near Leonora and Mt Bartle , which surrounds the Magellan Lead Mine near Wiluna.
good neighbors
The project is led by Managing Director Alex Biggs, who was previously MD and CEO of Critical Resources (ASX:CRR) when it acquired the Mavis Lake lithium project in Canada.
While the IPO market has lost some ground in 2022, Biggs said Stockhead’s battery metals are a good place for a low-end EV junior.
“The IPO space is certainly less busy now than it was a few months ago, a year ago,” he said.
“Obviously midway through this year it’s slowed down quite a bit.
“But we still see lithium as strong, I see the issue of critical minerals going strong. It’s a great place to park yourself and be exposed.
“Having a new company gives us the opportunity to grow from a relatively low EV to something we can be proud of.”
In addition to Fortescue’s investment and proximity to Liontown’s Anna pegmatite, Biggs said the Norseman District is becoming a closely watched exploration area.
“Our tenements are very close to that and around that we see continuous lithologies from (Liontown’s) tenements into our tenements,” he said.
“We also have a rental home to the north that is near Bald Hill’s lithium tantalum mine.
“Having such good neighbors around is very, very exciting and there is a lot of good work to be done in the region.
“Galileo Mining (ASX:GAL) of course, Larvotto (ASX:LRV) just south of us.
“So there’s a lot of activity in this region, it’s very difficult to get a foothold down there. We view it as very prospective, it is a proven base metals region and it is also an emerging lithium area.”
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