Z Chain Researcher | Li Ming Editor| LZ
From Tesla Lithium Hydroxide and 4680 Yahua Group, a subsidiary of Yahua International, subscribed for about 13.23% of the shares of Canadian Super Lithium Company for 5 million Canadian dollars on April 17, 2022, and acquired 60% of the equity of The wholly-owned subsidiary of Canadian Super Lithium Company in cash, and held the "Fogan Lake Hard Rock Spodumene Lithium Project" and "Georgia Lake Hard Rock Spodumene Lithium Mine Project".
The estimated resources of the Fogan Lake project are 6.4 million tons and the lithium oxide equivalent is about 140,000 tons; the georgia lake project mineral resources are 5.4 million tons, and the lithium oxide equivalent is about 65,000 tons. Yahua Group plans to build a lithium concentrate mining and dressing plant of 6% of lithium oxide in the first phase, and expand the production capacity in the second phase to 400,000 tons.
This latest move is just an extension of Yahua Group's strategy of becoming a "lithium salt supplier with global influence".
First, Yahua's lithium mine supply chain
Yahua Group currently has a comprehensive production capacity of 43,000 tons, and uses the non-public issuance of shares to raise funds to build 50,000 tons of battery-grade lithium hydroxide, 11,000 tons of lithium chloride and its products projects. In 2025, the comprehensive production capacity of lithium salt products is planned to be more than 100,000 tons.
Ya'an Lithium Phase I battery-grade lithium carbonate (lithium hydroxide) production line with an annual output of 20,000 tons has been officially put into production in 2020, and the ya'an Lithium Phase II 50,000-ton battery-grade lithium hydroxide, 11,000 tons of lithium chloride and its products project has started construction, of which the 30,000-ton battery-grade lithium hydroxide production line will be completed and put into operation at the end of 2022.
Yahua Group entered the lithium industry in 2013 through its shareholding in Guoli Company, and currently has four lithium industry companies, Nameli Corporation, Xingsheng Lithium, Ya'an Lithium and Lithium Technology, focusing on lithium hydroxide and equipped with lithium carbonate production capacity.
Yahua Group builds a lithium mine supply chain through equity participation and underwriting agreements to provide long-term, stable and high-quality raw material guarantee to meet the production of lithium salt products.
1. The company's 37.25% shareholding in "Energy Investment Lithium Industry" owns the mining right of Lijiagou spodumene mine, and according to the agreement, the lithium concentrate mined and processed by Lijiagou Lithium Mine will be given priority to meet the production and supply of Guoli Company, a 56.26% subsidiary of Yahua Group (the other 37.74% is held by Nengtou Lithium).
The core asset of the lithium industry is Lijiagou spodumene mine, with lithium oxide reserves of about 510,000 tons, equivalent to 1.2666 million tons of LCE, which is currently one of the largest spodumene mines in Asia that has obtained mining warrants. According to the annual mining of 1.05 million tons of raw ore, about 170,000-180,000 tons of lithium concentrate calculation, the estimated mining life is about 40 years. At present, the Lijiagou spodumene ore concentrator is under construction and will be put into operation in 2022.
2. 2018 Lithium Concentrate Offtake Agreement with Galaxy Lithium Australia Limited to 2025. The product supplied by Galaxy Lithium to Yahua International is spodumene concentrate, and the annual supply in 2020 is not less than 45,000 tons; the annual supply of each contract from 2021 to 2025 is not less than 120,000 tons, and when it exceeds 120,000 tons, Yahua International has the right of first refusal under the same conditions.
3. Participated in 10.06% of the shares of Core Company in Australia and reached a lithium concentrate underwriting agreement, Yahua International and Core's wholly-owned subsidiary Lithium Industry Development agreed to start commercial production from the lithium deposit to November 30, 2023, Yahua International purchased at least 300,000 dry tons of about 6% lithium oxide concentrate from Lithium Development. Lithium deposits were put into operation, and Yahua International purchased 75,000 dry tons of lithium concentrate floating no more than 10% per year.
Core is an Australian resource exploration and development company with 100% of the rights to the Phoenix Lithium Mine, which is located in the Northern Territory of Australia. The Glantz mine in the Fenis Lithium Mine has 2.89 million tonnes of ore reserves at a grade of 1.48% for lithium oxide, and the BP33 lithium mine near Glantz currently has reserves of 2.15 million tonnes at a grade of 1.51% lithoxide.
4. Participate in 9.5% of the equity of Australia EV Resources Company, EV Resources Co., Ltd. holds 80% of the interests of the Xiaohe lithium tin tantalum project in Australia, 22% interest in the Serbian clay lithium boron project, 80% interest in the Austrian Weinbeni project and the Eastern Alps lithium mine project, as well as the Australian Khartoum Tin Silver Wu project, the United States Arizona New Standard Copper Mine Project, peru YanaMina gold mine project non-lithium resource project.
The Xiaohe Lithium Tin Tantalum Project consists of 22 exploration licences covering an area of 70 square kilometres; the Weinbeni and Eastern Alps Lithium Projects in Austria are located in Vienna, Austria, adjacent to the Wolfsberg Project, consisting of 8 exploration rights, of which 1 exploration right for the Weinbeni Mine has an exploration area of 27.5 square kilometres, and the Eastern Alps Project has 7 exploration rights with an exploration area of 36.6 square kilometres, and 70 samples have been sampled at an average grade of 1.61% for lithium oxide at a maximum grade of 3.39%.
5. Subsidiary Yahua International 0.75 AUSTRALIAN DOLLARS 3.4% of Australian ABY Company shares per share, and entered into an off-take and sale agreement. ABY has mineral resources in Sudan and Ethiopia, ABY's founders and core team have experience in the development of major mines in Africa, and the core assets are mainly the 51% owned Kenticha lithium mine in Ethiopia.
Kenticha Lithium Mine has proven 67.4 million tons of lithium resources, with a total resource range of 80-110 million tons of lithium resources, equivalent to more than 1 million tons of Li2O. In addition, the overall resource scale of the southern and northern reserves is comparable to the pegmatites of the Talison and Wodgina projects in Australia.
The overall technical and operation team of Kenticha Lithium Mine comes from the former Galaxy Lithium Industry in Australia, and the first phase of lithium concentrate of the 200,000-ton production line will be delivered in the second quarter of 2023. ABY developed the Kentitcha project in Oromia, southern Ethiopia, and Yahua International provided ABY with a minimum of 120,000 tonnes of lithium concentrate every 12 months contract year.
6. Participate in 5.01% of the equity of Australia Eastern Resources Company, lock in lithium mine targets with Eastern Resources Company, and continue to cooperate in the development of lithium mineral resources.
Second, the world's top stream "Testa" blessing
Yahua Group's accelerated expansion in the lithium salt business has a great relationship with the long-term purchase order issued by Tesda, the world's largest new energy vehicle manufacturer, in 2020.
On December 29, 2020, Ya'an Lithium, a subsidiary of Yahua Group, signed a battery-grade lithium hydroxide supply contract with Tesla Corporation of the United States, agreeing that from 2021 to 2025, Tesla would purchase a total of $630 million to $880 million worth of battery-grade lithium hydroxide products from Ya'an Lithium. In the first half of 2021, the contract recognized revenue of 103,400 yuan, and the product has not yet begun to be supplied in batches.
Among the many suppliers of Tesda, Weiyahua Lithium is a direct supplier. The secretary of the board of directors of Yahua Group also confirmed in the interaction with investors that the company is the main supplier of Tesla's 4680 battery, and the 4680 battery will grow at a rate of 10 times per year from 2022 to 2023.
In addition to Tesda, Yahua Group is also a supplier of BYD, Beiterui and Xiamen Tungsten New Energy.
Third, sufficient money
Yahua Group maintains a low debt ratio under the rapid growth of performance, with the debt ratio of less than 40% in the past 5 years, and the debt ratio of Q3 in 2017-2021 is 34.82%, 36.91%, 39.48%, 21.76% and 22.62%.
Yahua Group comprehensively adopts the forms of additional issuance and convertible bonds, as well as domestically guaranteed foreign loans, to leverage low-cost overseas funds, making its financing costs extremely low, and its capital ecology and financing capabilities excellent.
In September 2013, Yahua Hong Kong Company applied to a domestic bank for a domestically guaranteed foreign loan business of not more than RMB150 million.
In April 2019, 800 million yuan of convertible corporate bonds were issued, and the coupon rate of convertible bonds: 0.40% in the first year, 0.60% in the second year, 1.00% in the third year, 1.50% in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. The raised funds were used for the "annual output of 20,000 tons of battery-grade lithium carbonate (lithium hydroxide) production line project" and supplementary working capital projects.
In December 2020, Yahua Group issued 107 million shares to specific targets, raising 1.499 billion yuan to invest in the construction of new projects with an annual output of 50,000 tons of battery-grade lithium hydroxide, 11,000 tons of lithium chloride and its products.
Fourth, the compound growth rate of revenue is 22.05%, and the compound growth rate of profit is 40.41%
From 2017 to 2021, the operating income increased from 2.358 billion yuan to 5.233 billion yuan, a compound growth rate of 22.05%, and the net profit rose from 238 million yuan to 925 million yuan, with a compound growth rate of 40.41%.
Produced by Ruilan Financial News
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Source: Blue Chip Corporate Review (ID: bluechip808)