The Company has a strategic relationship with the Chengdu Chemphys Chemical Industry Co. Ltd, of Chengdu, China. The relationship includes financial support as a major shareholder of the Company, and technical input to the development of the HMN Li Project. Chemphys boats a roaster of significant clients within the electronic industry, and lithium ion battery production industry. Mr. Yi Hua Dai and Ms Alison Dai from Chemphys sit on the board of the Company.
In 2017, the Company entered into an offtake agreement with Chemphys Chengdu of Chengdu China, covering all lithium products produced from the HMN Project. The offtake provides for the sale of lithium at prices related to market prices.The HMN offtake agreement is subject to the Company (i) establishing the necessary mineral reserves in commercial quantities and quality, (ii) building the necessary mining and processing facilities to extract and process lithium products, and (iii) obtaining sufficient financing on commercially reasonable terms in order to finance the achievement of each of the foregoing (i) and (ii) sufficient to achieve commencement of commercial production. If the Company is unable to satisfy these conditions by November 2029, the offtake agreement shall automatically terminate, (unless the parties otherwise agree in writing).
Chemphys will have a right of first offer to negotiate in good faith (with no obligation of the Company to accept) the right of Chemphys to acquire a portion of the Company’s entitlement to annual production of lithium products from any other lithium project from which the Company is entitled to acquire or sell lithium products, such right on terms and conditions as the Parties may agree.
Chemphys was established in 1998, and has since grown into a high-tech enterprise, both ISO9001 and ISO14001 certified. The company specialises in the production of high purity (99.99%) Lithium Carbonate and battery grade Lithium Hydroxide for the manufacturing of cathode materials and electrolytes of lithium ion batteries. Chemphys was one of the first Chinese suppliers to export high purity Lithium Carbonate and battery grade Lithium Hydroxide to leading cathode materials and lithium hexafluorphosphate manufacturers in Japan and South Korea. Chemphys also produces 99.995% Lithium Carbonate which is used to manufacture single crystal substrates for surface acoustic wave and integrated optic devices. In addition, the company produces high purity Lithium Carbonate and Boric Acid for the production of fusion fluxes, Lithium Borates for XRF analysis, and numerous other specialized materials. Chemphys has a strong research and development capability and works closely with customers to develop new materials. Chemphys product is recognized by all major lithium ion battery materials manufacturers and is an integral part of the electric vehicle supply chain.
Established in 1998, Chengdu Kaifei High Energy Chemical Industry Co., Ltd. is a wholly foreign-owned high-tech enterprise. The company specializes in R&D, production and sales of chemical powder materials with high purity, special appearance and function. It has passed IS09001 and ISO14001 certification, and is currently a long-term supplier of many Fortune 500 companies. The products are mainly sold abroad and are recognized as the quality standard in the industry.