Iris Metals (ASX:IR1) has jumped over 20% in early trades, climbing past 30cps, on a 90-day exclusivity deal with NASDAQ-listed Stardust Power.
The US$367.6M (A$565M) market cap company is developing a large lithium refinery in Oklahoma’s Muskogee region; Stardust recently became an investor in Iris during a recent $8M placement from the latter.
The 90-day deal is ultimately an exclusivity period where both companies will bunker down to figure out if they can logically synergise their efforts, and then, if so, work towards an economically feasible relationship.
Or, in company speak:
“The agreement will allow the companies to further explore commercial and strategic opportunities, including a commercial offtake arrangement for battery-grade lithium production, financing or other investment in IRIS Metals or its affiliates,” Iris wrote on Thursday.
At this time, there’s no guarantee of that.
But Iris Metals, listed on the ASX with operations based in South Dakota, has two assets with a lithium focus – Tin Mountain, and, a cluster of projects referred to as ‘Helen Beryl, Dewy & Edison.’
And Stardust, building a lithium refinery, needs material to refine to make it feasible. Still-too-low lithium prices broadly continue to hamper a number of developments.
in Australia, MinRes (ASX:MIN) yesterday mothballed its lithium flagship; Liontown (ASX:LTR) recently downsized its main operations. That isn’t even scratching the surface of major lithium players who’ve given up in Australia while the prices don’t make it make sense.
But then there’s another issue – not to be too doom and gloom.
All of America – if not the world – are waiting to see just how anti-ESG Trump gets when he takes the throne, again, next January.
Biden’s Inflation Reduction Act (IRA) is expected to be watered down significantly, though, with Musk alongside Trump, concessions for lithium batteries and the supply chains needed for them could survive.
Which, if this finance journalist had to guess, is why the companies have signed a three month deal to wait and see.
IR1 last traded at 33cps.
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