Lithium Energy Nets $52M from Solaroz Sale, Targets New Gold-Copper Frontier

Solaroz Sale Milestone Achieved

Lithium Energy Limited (ASX: LEL) has marked a significant milestone in its strategic divestment with the receipt of US$26 million (~A$40 million) on completion of Tranche 1 of the Solaroz Lithium Brine Project sale to CNGR Netherlands New Energy Technology B.V. This follows an earlier US$6 million second deposit, bringing total proceeds received to approximately US$33.8 million (~A$52 million). The sale, valued at US$63 million (~A$97 million), is structured in two tranches, with the second tranche expected to complete in January 2026.

The Solaroz Project, located in Argentina’s lithium-rich ‘Lithium Triangle’, holds a substantial JORC Mineral Resource of 3.3 million tonnes lithium carbonate equivalent (LCE), including a high-grade core of 1.3 million tonnes LCE. The project’s proximity to world-class lithium operations and recent environmental approvals underpin its strategic value.

Capricorn Gold-Copper Belt Acquisition Signals Growth

In a clear pivot towards diversification, Lithium Energy has entered into agreements to acquire a 100% interest in the Capricorn Gold-Copper Belt Project in Central Queensland. The district-scale project comprises 10 contiguous exploration tenements totaling 1,795 square kilometers, adjacent to the historic Mt Morgan Gold Mine. The acquisition, structured in two tranches, involves staged payments totaling approximately $3 million, contingent payments up to $2.5 million based on exploration success, a 2% net smelter royalty, and a $4 million expenditure commitment over 21 months.

The Capricorn Project is prospective for gold, porphyry copper, and volcanic massive sulphide mineralisation. Lithium Energy plans to leverage modern geophysical techniques and extensive drilling to unlock the project’s potential, signaling a strategic expansion beyond lithium into broader battery and base metals.

Axon Graphite IPO Advances

Lithium Energy shareholders approved the spin-out of Axon Graphite Limited in February 2025, a move designed to consolidate high-grade graphite assets from Lithium Energy and NOVONIX Limited. Axon Graphite aims to raise a minimum of $15 million, with the potential to extend to $25 million, through an IPO on the ASX. The merged entity will hold a combined graphite inventory exceeding 4.4 million tonnes, positioning it as a vertically integrated battery anode material (BAM) producer.

This spin-out aligns with Lithium Energy’s strategy to focus on core competencies while unlocking shareholder value through targeted asset realignment. The IPO proceeds are expected to fund feasibility studies and pilot plant development, advancing the transition from exploration to production.

ASX Suspension and Path to Reinstatement

Trading in Lithium Energy shares remains suspended on the ASX following the company’s decision to divest its primary asset, Solaroz. The ASX requires Lithium Energy to demonstrate a sufficient level of operations to justify reinstatement. The company is actively pursuing new resource acquisitions, such as the Capricorn Project, to meet these criteria.

Management has indicated that the reinstatement process may involve re-compliance with ASX Listing Rules, potentially including a fresh prospectus. The company is also considering returning part of the Solaroz sale proceeds to shareholders, subject to tax and funding assessments.

Robust Mineral Resource Base and Test Work

Lithium Energy’s asset base is underpinned by detailed JORC Mineral Resource Estimates. The Solaroz Project boasts a total resource of 3.3Mt LCE, with a high-grade core averaging 400 mg/l lithium concentration. The Burke Graphite Project holds 9.1Mt at 14.4% total graphitic carbon (TGC), while the Corella Graphite Project adds 13.5Mt at 9.5% TGC.

Metallurgical test work conducted by international specialists has confirmed the suitability of the graphite concentrates for battery anode material production, achieving high purity and recovery rates. These technical validations support the company’s downstream ambitions through Axon Graphite.

Financial Position and Outlook

During the quarter, Lithium Energy reported net cash inflows from investing activities of approximately $9 million, primarily from the Solaroz sale proceeds, offset by exploration and evaluation expenditures. Operating cash outflows totaled $616,000, with cash and equivalents standing at $9.8 million at quarter-end, providing a runway of nearly 10 quarters at current expenditure levels.

Looking ahead, Lithium Energy’s focus will be on advancing exploration at Capricorn, completing the Solaroz sale, and supporting the Axon Graphite IPO. The company’s strategic repositioning aims to restore market confidence and operational momentum following the ASX suspension.