REMMY -Rare Earth Minerals Plc

Tesla Model 3 Ignites Lithium Race Tesla signed two potential suppliers in 2015 – Rare Earth Minerals and Bacanora Minerals.
Tesla Motors’s Gigafactory battery production facility in Nevada, which is designed to primarily produce lithium-ion cells for upcoming Tesla Model 3, but is as of today at an early stage (we believe) with battery pack assembly for energy storage.

Future cell production in high volume will also require volume lithium supplies, and Tesla signed two potential suppliers in 2015 – Rare Earth Minerals and Bacanora Minerals.

 

Tesla Motors found its first lithium suppliers for the Gigafactory –Rare Earth Minerals and Bacanora Minerals, two companies that are already interconnected in the mining business.

Joint venture partners will work under the Sonora Lithium Project in Northern Mexico to supply Tesla with lithium hydroxide.

Due to the large scale of the Gigafactory (lithium-ion cell production 35 GWh annually), Tesla needs a lot of raw materials and now is in the process of establishing a supply chain.

An interesting article from business stand point was recently published by LearnBonds.com, in which the whole project of the Gigafactory is described as risky.

In the press release from Rare Earth Minerals we note that both companies first need to secure financing through debt and/or equity, before they will be able to demonstrate that the Sonora Lithium Project is up to the task of supplying approximately 35,000 tonnes of lithium compounds annually.

 

Rare Earth Minerals Plc.

(“Rare Earth Minerals”, “REM” or “the Company”)

Sonora Lithium Project Signs Lithium Supply Contract

Rare Earth Minerals and (LSE AIM: REM) and Bacanora Minerals Ltd. (TSX-V: BCN and LSE AIM: BCN),the joint venture partners of the Sonora Lithium Project1 in Northern Mexico (Bacanora and REM are collectively referred to as the “Sonora Lithium Project Partners”), have finalised a conditional long-term lithium hydroxide supply agreement with Tesla Motors, Inc. (“Tesla”), the maker of electric vehicles and energy storage solutions (“The Supply Agreement”).

The Sonora Lithium Project Partners are working to develop a mineral-rich, lithium-bearing clay deposit into a planned low-cost sustainable and environmentally conscious mining operation. It is estimated that the mine and processing facility will have an initial production capacity of approximately 35,000 tonnes of lithium compounds, with scaling potential of up to 50,000 tonnes per annum. To achieve this, the Sonora Lithium Project Partners will need to raise finances to design and construct a mine and processing facility. It is currently anticipated that lithium hydroxide and lithium carbonate would be among the materials produced by the mine. Lithium hydroxide is a key feedstock material in the manufacture of certain kinds of lithium-ion battery cells.

On the condition that, over the next two years, the Sonora Lithium Project reaches certain performance milestones and successfully passes product specification qualifications, Tesla – or its authorised purchasers – will buy lithium hydroxide to feed the manufacturing of batteries at Tesla’s Gigafactory in Nevada. One of the key milestones will be the confirmation that the Sonora Lithium Project will be able to supply lithium hydroxide in accordance with volumes and timeframes to be established by Tesla. The Supply Agreement has an initial five year term commencing from the date of the first order by Tesla, with an option to extend for a further five years.

During the initial five years, and subject to certain terms and conditions in relation to project execution, product quality, pricing and timing of delivery, Tesla will purchase agreed minimum tonnages, with estimated forecasted maximum deliveries to be determined following delivery of future production orders from Tesla. Tesla will purchase minimum quantities in accordance with an agreed upon pricing formula, below current market prices, with actual prices and volumes that can only be finalized during the development phase in due course. The forecast tonnages and delivery dates are structured to coincide with Tesla’s forecasted Gigafactory production. This agreement will form a portion of Tesla’s anticipated lithium-based feedstock needs; the remainder of which is expected to come from other lithium peers.

To meet both Tesla’s minimum and forecasted tonnages and timelines and any other potential market demands, the Sonora Lithium Project Partners will need to design and construct a suitable mining and processing operation. This will require the Sonora Lithium Project Partners to secure significant financing through debt and/or equity. Tesla has the right to participate in any such financing or other capital transactions. Bacanora and REM will be pursuing next steps to raise finances in order to achieve this goal. There can be no assurance that the conditions to supply product under the supply agreement will be met or that the agreement will prove to be economic.

Development work to be used for the pre-feasibility study (“PFS”) for the Sonora Lithium Project is currently being carried out. The PFS alongside additional studies will establish a revised estimate of capital and operating costs, taking into account the new product mix that will be required to service Tesla’s anticipated demands plus those of any additional potential customers.

Details of REM’s ownership of the Sonora Lithium Project:

REM owns a direct interest of 16.4% in Bacanora, and through that holds an indirect interest in the La Ventana asset of 16.4%. In addition to the 16.4% in Bacanora, when aggregated with REM’s 30% direct interest in Megalit S.A de CV (the company holding the Buenavista, Megalit and San Gabriel concessions) and the 30% direct interest in Mexalit S.A de CV (the company holding El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions), results in a total economic interest in each of these companies of Megalit S.A. de CV and Mexalit S.A. de CV of 41.47%.

 

http://insideevs.com/tesla-model-3-ignites-lithium-race/

 

http://www.prnewswire.com/news-rele...4621-billion-worldwide-by-2022-575386231.html

 

They won't be able to ignore us forever !!!!!

 

Looks like Clay is gaining interest with other producers,



By KASIA PATEL
Published: Tuesday, 12 April 2016


Hectatone Inc., a subsidiary of Lithium Americas Corp., has entered into a strategic alliance with TOLSA S.A. The companies will work together, targeting the global clay minerals markets and collaborating in a number of different areas. The potential alliance exemplifies how producers are turning to other, niche, markets as demand flags in the oil and gas drilling markets

· Non-exclusive Memorandum of Understanding (MoU) to pursue growth in clay markets.

· Includes a supply agreement of...

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Hopefully Clay will cause them big problems

 

A lot of views on Remmy now ... Must be sinking in

And no it's not ramping do your own research but plenty on here to look at.

 

http://www.bloomberg.com/news/artic...s-lithium-gains-as-outback-mining-stocks-soar

 

Well done guys keep up the good PR work, someone needs to inform our cousins whats happening down south. Good News coming soon.