In what has been diplomatically described as a setback, Australian company Novo Litio has just lost its bid for the rights to lithium mining in the northern area of Sepeda, Montalegre.
The decision has come just as the prospecting licence, held in the name of Portuguese company Lusorecursos, is due to expire.
Suggests Jornal de Notícias the result could leave Novo Lítio, previously known as Dakota Minerals, with “enormous damages”.
This is a legal fight that began last June when Novo Lítio – then Dakota Minerals – “inked a binding deal with Lusorecursos to acquire a tenement package (mining licence) over the three most prospective areas for spodumene and petalite-hosted lithium in Portugal”, explains mining industry news source Stockhead.
Novo has been “trying to get its hands on a mining licence application for the project”, but LusoRecursos has been “playing hardball”, said Stockhead in September.
Thus the decision to take the matter to the courts, which “didn’t excite” Novo’s shareholders and saw the company’s share price fall 9%.
“Throughout the legal battle, the company has still been able to continue work at the Sepeda project, but is expecting a lower cash burn of 945,000 dollars in the current quarter compared to the 1.5 million spent in the September quarter”, said Stockhead last week.
What yesterday’s ‘setback’ will mean on multiple fronts – not least financial – is unclear.
Negocios online says the “bad relationship” between Lusorecursos and Novo Lítio has intensified since the start of the latter’s legal action, with the Novo allegedly hiring security guards to “dissuade the entrance of third parties, namely members of Lusorecursos, onto concession property”.
The problem is that the licence about to expire is held by Lusorecursos, not Novo Lítio.
Says negociosonline, this salient detail has seen the Braga court that declined to see things Novo’s way telling the company that “even if it wanted to” requesting an mining licence in its own name would be an “enormous difficulty”, as the contract has always been in the name of Lusorecursos.
With the court verto on Novo’s bid to get the contract transferred into its name, Lusorecursos is now free to seek a “definitive exploration licence”, while Novo Lítio faces trying to reclaim “eventual rights or reparation of damages” through the use of “judicial means”, says negocios, stressing this all s comes at a time when Novo Lítio has purportedly identified “the largest lithium resource in a lithium-cesium-tantalum deposit in pegmatite in Europe”.
In a nutshell, this spells massive potential for the production of lithium-ion batteries.
Indeed, Novo Lítio has “manifested the intention of investing between 200 and 400 million dollars up till 2019 to create in Montalegre an extraction and processing complex” for the manufacture of batteries “that would create 200 jobs”.
Negocios online wrote yesterday that it has tried without success to get a statement from Novo Lítio’s lawyers.