Tag: ALK

Alkemy Capital Investments plc (LON:ALK) (JV2:FRA) has announced the publication of its audited Annual Report and Accounts for the year ended 31 January 2024. 

Chairman’s Statement

I have great pleasure in presenting our Annual Report for the year ended 31 January 2024.

Alkemy Capital Investments plc was formed to invest in the critical minerals sector. As a holding company our aim is to foster the growth and expansion of our subsidiaries, steering them towards operational excellence and sustainable practices.

Our strategy is to finance the development of the individual businesses at the asset level through project related debt, and institutional equity or strategic partnerships.

Alkemy currently has three investments, excluding the service entity ACSA, namely:

·      Tees Valley Lithium Limited (“TVL”) which is actively developing the UK’s first Lithium Hydroxide processing facility at Wilton International in Teesside, UK;

·      Tees Valley Graphite Limited (“TVG”) which is seeking in partnership with Syrah Resources to develop a commercial scale natural graphite active anode material processing facility, also at Wilton International; and

·      Port Hedland Lithium Pty Ltd (“PHL”) which is potentially developing a lithium sulphate refinery in Port Hedland, Western Australia.

TVL, our most advanced project, has received planning and environmental permissions for the production of up to 96,000 tonnes per annum of battery grade lithium hydroxide to supply key UK and international customers. We have entered into feedstock and offtake arrangements with major partners and established other key strategic partnerships and have worked closely with government and regulatory bodies, reflecting our commitment to becoming a leader in the low-carbon production of battery-grade lithium chemicals. 

The success of these strategic initiatives and partnerships will place TVL at the forefront of Europe’s lithium refining sector, and we are looking to replicate this success across other key critical battery minerals, including graphite, with a view to developing a multi-minerals strategy.

Despite recent market shifts, European demand for lithium remains on an upward trajectory. With the UK and EU’s transition towards electric vehicles (EVs), there’s a forecasted demand for lithium that far exceeds current supply capacity. The UK and European Commission’s move to ban combustion engine cars by 2035 is a significant catalyst, signalling a shift towards a more sustainable and electric future. This policy change, along with similar initiatives worldwide, is expected to fuel a consistent and growing demand for lithium.

As Europe’s car makers make the switch to EVs to meet this burgeoning demand there is over 700GW of gigafactory capacity either in construction or planned to provide the batteries for these EVs. These gigafactories will require over 650,000 tonnes of locally refined lithium per year in the form of either hydroxide or carbonate depending on the type of vehicle. Currently the UK and Europe has limited lithium refining capacity. Building a European lithium processing facility will reduce the regional dependence on China, which currently controls 90% of the world’s lithium refining capacity.

Recognising the escalating demand for lithium, Alkemy has been actively developing its lithium refining portfolio through TVL and PHL.  Alkemy’s focus is not just on meeting the immediate market needs but on establishing a supply chain that is resilient, environmentally responsible, and capable of adapting to the rapidly evolving energy landscape.

Tees Valley Lithium

TVL is currently developing a lithium hydroxide monohydrate (“LHM”) refinery at the Wilton International Chemicals Park in Teesside, UK.

Since its inception, TVL has achieved a number of key milestones and in late 2023 reached an agreement in principle with Wogen Resources Limited to supply up to 20,000 tonnes of technical grade lithium carbonate feedstock per annum for an initial period of five years. The supply will be sufficient to fill the first of the proposed four trains at Wilton producing around 24,000 tonnes of battery grade lithium hydroxide or lithium carbonate equivalent.

Wogen is a leading international trader of off-exchange specialty metals and minerals, with a long history and well-established presence in the battery metals market across Asia, the United States and Europe. Wogen has an active trading book in lithium products procuring from an array of producing countries and selling into the battery supply chain.

In late 2023 Alkemy and TVL appointed to their respective Board of Directors battery metals supply chain expert Vikki Jeckell. Vikki’s appointment comes at a crucial time for Alkemy as it embarks on its ambitious growth plans in the rapidly evolving battery materials sector. Vikki brings a wealth of experience and expertise in supply chain management, particularly within the battery materials industry. Her extensive background includes five years at Johnson Matthey as Head of Supply Chain Strategy for Battery Materials.

TVL, also in late 2023, awarded preferred vendor status to industry leaders Jord Proxa and Eurodia Industrie SAS. The completion of the technology selection process and the awarding of preferred vendor status to these two industry leaders is an important step forward in the project’s development.

TVL is currently in advanced discussions with a number of offtake customers, including European gigafactories and electric vehicle original equipment manufacturers (OEMs). These customers are increasingly focussed on price, transparency and low embedded carbon, when sourcing high grade lithium products.

By sourcing low carbon feedstock and powering an electrochemical refining process with offshore wind, TVL aims to supply its UK and European customers with the world’s lowest-carbon lithium hydroxide.

TVL is currently in discussions with a number of leading financial institutions for the financing of its Wilton refinery. The US$300m approximate capital cost of train 1 is expected to be financed largely through green bonds (for which TVL will seek accreditation) combined with a mix of debt, strategic equity finance and grant funding, all at project level.

Having secured feedstock for its first train at Wilton, a key component for these financing discussions, TVL is in discussions with leading financial institutions and strategic partners to obtain project-level funding that will enable it to complete Front End Engineering Design (FEED) and reach a final investment decision for the bond finance. TVL continues to make steady progress in these discussions and will update the market as soon as this key piece of funding is secured.

Port Hedland Lithium

In 2022, Alkemy announced the launch of its strategy to build a lithium sulphate monohydrate (“LSM”) refinery in Port Hedland, Australia, to serve as a refining hub for Australian spodumene producers. PHL has secured an allocation of land at the new Boodarie Strategic Industrial Area, alongside other global leaders in the green industrial sector, to facilitate the development of the Port Hedland LSM refinery.

In August 2023, PHL announced the completion of a Class 4 Feasibility Study for its LSM refinery, each train of which will process spodumene concentrate to produce 40,000 tonnes of lithium sulphate annually. In addition, a Flora and Fauna baseline survey was completed as part of the required environmental approvals. PHL will continue to develop its LSM refinery, either standalone or in conjunction with strategic partners, several of whom it is currently in discussions with.

Building the Port Hedland LSM refinery will provide Australian spodumene producers with a complete mid-stream lithium refining solution with direct access to the European market through TVL’s LHM refinery in Teesside, UK. Importantly, the Port Hedland LSM refinery will bring major value-adding to the Pilbara region, with significant multiplier benefits for the local community and the State of Western Australia, whilst reducing the carbon footprint of the end-to-end lithium battery cell supply chain to meet new European emissions standards.

Tees Valley Graphite

In January 2024, Alkemy announced the launch of TVG and that TVG had entered into a non-binding memorandum of understanding (MOU) with Syrah Resources (SYR:ASX) (“Syrah”) for the establishment of a joint venture to develop a commercial-scale natural graphite active anode material (“AAM”) processing facility (“Wilton AAM facility”) located at the Wilton International Chemicals Park in Teesside, UK.

Syrah and TVG are currently negotiating a binding joint venture agreement and will each initially have a 50% interest in the joint venture. The Wilton AAM facility is proposed to be supplied with natural graphite from Syrah’s Balama graphite project in Mozambique, the world’s largest integrated graphite operation.

The joint venture will combine Syrah’s global graphite development, operations and sales expertise with Alkemy’s UK development capabilities at the plug-and-play Wilton International Chemicals Park, benefitting from well-established infrastructure, essential utilities, and the Teesside Freeport.

The joint venture will target an initial production capacity of 20,000 tonnes AAM per annum for supply into cell manufacturers and OEMs located in the UK and European battery markets.  The Wilton AAM facility is expected to gain access to low-carbon offshore wind power providing 100% certified green low-cost energy enabling it to produce a low carbon product.

The Wilton AAM facility will leverage the successful planning and approvals and local knowledge gained by Alkemy portfolio company TVL and will aim to lower construction costs, project delivery timeframes and bring forward first production by replicating and upscaling the technology and design used at Syrah’s Vidalia AAM facility in Louisiana, United States.

Syrah is a leading ex-China supplier of quality graphite products and has significant practical knowledge and know-how in the development of an AAM processing facility, including in feasibility, detailed design and engineering, process technologies, equipment selection and procurement, construction management and product development, product qualification and offtakes.

Syrah and TVG intend to enter into a binding joint venture agreement, which will govern feasibility and permitting workplans and schedules, budget and relevant milestones associated with the Wilton AAM Facility. Ultimately, development of the Wilton AAM facility is planned to be subject to a final investment decision being unanimously approved by Syrah and TVG following the completion of further technical studies, receipt of approvals, entry into a shareholders’ agreement, incorporation of a project company, and financing and offtake commitments. Syrah and TVG will each initially have a 50% interest in the joint venture.

The Wilton AAM facility is expected to be financed at project level through green bonds (for which accreditation shall be sought), combined with a mix of debt, strategic equity finance and grant funding (via domestic and accessible international grant funding programmes).

In conclusion, I would like to take this opportunity to thank our shareholders for their continued support and look forward to reporting on our progress during the course of 2024.

Paul Atherley                                                                                      

Non-Executive Chairman                                                                     

30 May 2024                                                                                        

Strategic Report

The Directors present the Strategic Report of the Group for the year ended 31 January 2024.

Review of business and future developments

The Company was incorporated and registered in England and Wales on 21 January 2021 and on 27 September 2021 was admitted to the Standard Listing segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange.

The Company was formed to undertake an Acquisition of a controlling interest in a company or business. Given their experience, the Board focused on the mining and technology metals sectors.

On 25 February 2022, the Group announced that it had entered into an exclusivity agreement (the “Exclusivity Agreement”) with Sembcorp Utilities (UK) Limited and a heads of terms in respect of a proposed option to enter into a lease over a brownfields site (the “Site”) at Wilton International (the “Agreement to Lease”) and a long lease over the Site. Wilton International is a well-established chemical engineering park located in Teesside, a major Freeport in the UK. The entering into the Exclusivity Agreement and incorporation of TVL constituted an Acquisition and reverse takeover transaction under the rules of the London Stock Exchange.

On 19 December 2022 the Group announced that it had entered into the Agreement to Lease pursuant to which an agreed form lease may be entered into by TVL, a subsidiary of the Company, following the completion of certain conditions precedent under the Agreement to Lease (the “Lease”). It is intended that TVL will be the operating company that develops the Project.

If the Board determines that the opportunities presented by the development of the Site would be in the best interests of shareholders, the Group, via TVL, intends to enter into the Lease and to commence the design, finance and construct of a plant that will produce lithium hydroxide monohydrate from lithium sulphate or carbonate feedstock with a view to becoming a key supplier to the UK and European battery cell manufacturers (the “Project”).

The principal activity of the Company is to act as the holding company to TVL, an operating subsidiary, which will enter into the Lease. The Company will provide a parent company guarantee to Sembcorp in order to guarantee the operating subsidiary’s obligations under the Lease. The Company aims to implement an operating strategy with a view to generating value for its shareholders through the creation of a lithium hydroxide monohydrate facility.

Key developments for the Group during the course of the financial year included the following:

·      In August 2023, PHL announced the completion of a Class 4 Feasibility Study for its LSM refinery, each train of which will process spodumene concentrate to produce 40,000 tonnes of lithium sulphate annually. In addition, a Flora and Fauna baseline survey was completed as part of the required environmental approvals.

·      In late 2023 the Company reached an agreement in principle with leading international trader Wogen Resources Limited to supply up to 20,000 tonnes of technical grade lithium carbonate feedstock per annum for TVL’s LHM refinery for an initial period of five years. The supply will be sufficient to fill the first of the proposed four trains at Wilton producing around 24,000 tonnes of battery grade lithium hydroxide or lithium carbonate equivalent.

·      In late 2023 Alkemy and TVL appointed to their respective Board of Directors, battery metals supply chain expert Vikki Jeckell. Vikki’s extensive background includes five years at Johnson Matthey as Head of Supply Chain Strategy for Battery Materials.

·      TVL, also in late 2023, awarded preferred vendor status to industry leaders Jord Proxa and Eurodia Industrie SAS. The completion of the technology selection process and the awarding of preferred vendor status to these two industry leaders is an important step forward in the development of TVL’s LHM refinery.

·      In January 2024, Alkemy announced the launch of TVG and that TVG had entered into a non-binding MOU with Syrah Resources for the establishment of a joint venture to develop a commercial-scale natural graphite and active anode material (AAM) processing facility located at the Wilton International Chemicals Park in Teesside, UK.

·      In February 2024 the Company announced the appointment of Zeus Capital as Financial Adviser and Corporate Broker.

Alkemy was formed to invest in the critical minerals sector. As a holding company its strategy is to foster the growth and expansion of its subsidiaries, steering them towards operational excellence and sustainable practices and to finance the development of these individual businesses at the asset level through project related debt, and institutional equity or strategic partnerships.

TVL is currently in discussions with a number of leading financial institutions for the financing of its Wilton refinery. The US$300m approximate capital cost of train 1 is expected to be financed largely through green bonds (for which TVL will seek accreditation) combined with a mix of debt, strategic equity finance and grant funding, all at project level.

Having secured feedstock for its first train at Wilton, a key component for these financing discussions, TVL’s primary short term focus is to consummate discussions with leading financial institutions and strategic partners to obtain project-level funding that will enable it to complete Front End Engineering Design and reach a final investment decision for the bond finance.

Key performance indicators

When the Group enters into the Lease, financial, operational, health, safety, and environmental KPIs will become more relevant and reported upon as appropriate. As a result, the Directors are of the opinion that analysis using KPI’s is not appropriate for an understanding of the business at this time.

Principal risks and uncertainties

The principal risks and uncertainties currently faced by the Group are set out further in the Risk Management Report on page 18.

Gender analysis

A split of the Directors, senior managers and employees by gender at the end of the financial year is as follows:

Male – 2 (directors)

Female – 2 (directors)

The Group recognises the need to operate a gender diverse business. The Board will also ensure any future employment takes into account the necessary diversity requirements and compliance with all employment law. The Board has experience and sufficient training and qualifications in dealing with such issues to ensure they would meet all requirements. More detail will be disclosed in the future annual reports once the Company enters into the Lease and has completed its transition to an operating company.

Corporate social responsibility

The Group aims to conduct its business with honesty, integrity and openness, respecting human rights and the interests of shareholders and employees. The Group aims to provide timely, regular and reliable information on the business to all its shareholders and conduct its operations to the highest standards.

The Group strives to create a safe and healthy working environment for the wellbeing of its staff and to create a trusting and respectful environment, where all members of staff are encouraged to feel responsible for the reputation and performance of the Group.

The Group aims to establish a diverse and dynamic workforce with team players who have the experience and knowledge of the business operations and markets in which we operate. Through maintaining good communications, members of staff are encouraged to realise the objectives of the Group and their own potential.

Corporate environmental responsibility

This will become more relevant once the Company enters into the Lease and completes its transition to an operating company. The Board contains personnel with a good history of running businesses that have been compliant with all relevant laws and regulations and there have been no instances of non-compliance in respect of environment matters.

The Group’s policy is to minimize the risk of any adverse effect on the environment associated with its activities with a thoughtful consideration of key areas such as energy use, pollution, transport, renewable resources, health and wellbeing. The Group also aims to ensure that its suppliers and advisers meet with their legislative and regulatory requirements and that codes of best practice are met.

Section 172(1) Statement – Promotion of the Group for the benefit of the members as a whole

The Directors believe they have acted in the way most likely to promote the success of the Group for the benefit of its members as a whole, as required by s172 of the Companies Act 2006.

The requirements of s172 are for the Directors to:

1.         Consider the likely consequences of any decision in the long term,

2.         Act fairly between the members of the Group,

3.         Maintain a reputation for high standards of business conduct,

4.         Consider the interests of the Group’s employees,

5.         Foster the Group’s relationships with suppliers, customers and others, and

6.         Consider the impact of the Group’s operations on the community and the environment.

The pre-revenue nature of the business is important to the understanding of the Group by its members, employees and suppliers, and the Directors are as transparent about the cash position and funding requirements as is allowed under LSE regulations.

The application of the s172 requirements can be demonstrated in relation to the some of the key decisions made during 2023 and after the year end:

·      The completion by PHL of a Class 4 Feasibility Study for its LSM refinery

·      The execution of an agreement in principle with leading international trader Wogen Resources Limited to supply up to 20,000 tonnes of technical grade lithium carbonate feedstock per annum to TVL for an initial period of five years

·      The appointment of battery metals supply chain expert Vikki Jeckell to the boards of Alkemy and TVL

·      The awarding of preferred vendor status to industry leaders Jord Proxa and Eurodia Industrie SAS

·      The launch of TVG and the signing of a non-binding MOU with industry leader Syrah Resources for the establishment of a joint venture to develop a commercial-scale natural graphite AAM processing facility

·      The appointment of Zeus Capital Limited as financial adviser and broker

The Board takes seriously its corporate social responsibilities to the environment in which it works which will become more relevant once the Company enters into the Lease and completes its transition to an operating company.

Paul Atherley

Non-Executive Chairman

30 May 2024    

Board of Directors 

Paul Atherley – Non-Executive Chairman

Paul Atherley is a highly experienced senior resources executive with wide ranging international and capital markets experience. He graduated as mining engineer from Imperial College London and has held a number of senior executive and board positions. Paul is currently Chairman of LSE listed Pensana Plc which is establishing the world’s first independent and sustainable rare earth processing facility in the UK.

Paul is based in London and has broad experience in raising debt and equity finance for resource companies. He served as Executive Director of the investment banking arm of HSBC Australia where he undertook a range of advisory roles in the resources sector.  He has completed a number of acquisitions and financings of resources projects in Europe, China, Australia and Asia.

Paul is a strong supporter of Women in STEM and has established a scholarship which provides funding for young women to further their education in science and engineering.

Sam Quinn – Non-Executive Director

Sam Quinn is a corporate lawyer with over fifteen years’ worth of experience in the natural resources sector, in both legal counsel and management positions. Sam is a principal of Silvertree Partners, a London-based specialist corporate services provider for the natural resources industry. In addition Sam holds various other Non-Executive Directorships and company secretarial roles for listed and unlisted natural resources companies. During time spent in these roles, Sam has gained significant experience in the administration, operation, financing and promotion of natural resource companies.

Previously, Sam worked as the Director of Corporate Finance and Legal Counsel for the Dragon Group, a London based natural resources venture capital firm and as a corporate lawyer for Jackson McDonald Barristers & Solicitors in Perth, Western Australia and for Nabarro LLP in London.

Helen Pein – Non-Executive Director

Helen Pein has over 30 years’ experience in the natural resources sector and currently serves as a Director of Pan Iberia Ltd, Trident Royalties Plc and Panex Resources Pty Ltd.

Helen was formerly a Director of Pangea Exploration Pty Ltd, a company affiliated with Denham Capital where she was part of the team directly responsible for the discovery of a number of world-class gold and mineral sands deposit across Africa. Helen is a recipient of the Gencor Geology Award.

Vikki Jeckell – Non-Executive Director

Vikki Jeckell, appointed 20 November 2023, is a strategic procurement and supply chain expert with over 15 years’ worth of experience in the sector and is the former the Head of Supply Chain Strategy Development & Control for Battery Materials at Johnson Matthey. In this role Vikki, led transformative initiatives, including the establishment of an industry-leading responsible sourcing program and the formation of strategic partnerships, contributing substantially to the company’s global supply chain capabilities.

Vikki has also worked as Head of Supply Chain Development for hydrogen company LIFTE H2, held a senior leadership role at Women in Green Hydrogen and in 2022 she founded Supply Tactics Limited, a consultancy firm dedicated to enhancing supply chain management within the batteries and hydrogen sectors.

Vikki has provided expert testimony to House of Commons committees on several occasions, reflecting her commitment to help shaping policies within energy transition. Vikki holds an LLB and an MBA.

Directors’ Report

The Directors present their annual report together with the financial statements and Auditor’s Report for the year ended 31 January 2024.  The following information is not presented in the Directors’ report as it is presented in the Strategic Report in accordance with s414C(11); Review of business, Key Performance Indicators, Principal risks and uncertainties, Gender analysis, Corporate social responsibility, Corporate environmental responsibility, Section 172(1) statement.

Results and dividends

The results of the Group for the year ended 31 January 2024 are set out in the Statement of Comprehensive Income on page 29. The Directors do not recommend the payment of a dividend for the year.

Directors and Directors’ interests

The Directors who served during the year to date are as follows:

Paul Atherley

Sam Quinn                   

Helen Pein

Vikki Jeckell (Appointed 20 November 2023)

The beneficial shareholdings of the Board in the Company as at 31 January 2024 were as follows:

	Number of ordinary shares	% of issued share capital	Share options
P Atherley	3,313,714	37.59%	250,000
S Quinn	446,428	5.06%	215,000
H Pein	25,000	0.28%	75,000
V Jeckell	–	–	175,000

Director incentives

Details on Directors remuneration can be found in the Directors Remuneration report on page 15.

Substantial shareholders

As at the date of this Report, the total number of issued Ordinary Shares with voting rights in the Company was 8,814,851. The Company has been notified of the following interests of 3 per cent or more in its issued share capital as at the date of this report.

Shareholder	Number of ordinary shares	% of issued share capital
Paul Atherley	3,313,714	37.59%
Sam Quinn	446,428	5.06%

Corporate governance

The Group has set out its full Corporate Governance Statement on page 23. The Corporate Governance Statement forms part of this Directors’ report and is incorporated into it by cross reference.

Greenhouse gas disclosures

As the Group remains in the early stages of development without any current physical operations across its portfolio of projects, it is not practical to obtain and analyse emissions data for the Group operations.  However, given the minor level of physical operations in the year, and the lack of any plant or office space, the carbon footprint and climate change impact of the Group’s operations are considered to be negligible, and in any event below the 40 MWh threshold prescribed for detailed emissions disclosures. 

As such, the Group does not consider it relevant to provide climate related disclosures under the recently enacted TCFD guidelines, nor would determination of the relevant emissions data be practical.  Once the Group has commenced the construction of physical premises across any of its projects, and hence transitioned into an operating company, it will revisit its position on climate disclosures accordingly.

Supplier payment policy

The Group’s current policy concerning the payment of trade creditors is to follow the CBI’s Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

The Group’s current policy concerning the payment of trade creditors is to:

·      settle the terms of payment with suppliers when agreeing the terms of each transaction;

·      ensure that suppliers are made aware of the terms of payment by inclusion of the relevant terms in contracts; and

·      pay in accordance with the Group’s contractual and other legal obligations.

Financial instruments and risk management

The Group is exposed to a variety of financial risks and the impact on the Group’s financial instruments are summarised in the Risk Management Report. Details of the Group’s financial instruments are disclosed in note 17 to the financial statements.

Directors’ insurance

The Group has implemented Directors and Officers Liability Indemnity Insurance.

Events after the reporting year

On 26 February 2024 the Group appointed Zeus Capital as financial advisor and broker.

Going concern

As part of their assessment of going concern, the Directors have prepared cash forecasts to determine the funding requirements of the business over the 18 months from the reporting date. Cash requirements over this period have been projected in the range of a £2m minimum (decelerated project development case) to £9m maximum (accelerated project development case) depending on the level of technical project development work being undertaken, as determined by funding availability.

As at the date of this report, the Directors are considering a variety of funding options from numerous parties to consider the option best suited to balancing the immediate cash flow needs of the business and desire to accelerate the project development timeframe against the need to avoid unnecessary dilution of the shareholders during a period of depressed equity market prices.  Options ranging from:

·      project level debt or strategic equity which would provide sufficient funding to accelerate the project development program over the period of consideration, including the Wilton LHM refinery train 1 FEED study alongside development of the Port Hedland LSM refinery and TVG graphite projects, as well as general working capital requirements;

·      market equity placings to secure working capital funding needs whilst project development funding opportunities continue to be assessed;

·      convertible lending facilities which may act as a hybrid of working capital and project development funding, allowing progression of project development at a less accelerated rate that would be the case under a more substantial project lending facility;

·      any combination of the above.

The Board remains in detailed discussions on the above funding opportunities and anticipates concluding this process in the near term.

The Directors are therefore reasonably confident that the necessary funding will be secured, as and when required, by executing on one of the above options under consideration, such that the Directors have a reasonable expectation that the Group will continue in operational existence for the next 12 months.  However as successful execution of one of the above fundraising options cannot be assured, a material uncertainty exists which may cast significant doubt on the ability of the company and group to continue as a going concern and realise its assets and discharge its liabilities in the normal course of business.

Accordingly, the Directors believe that as at the date of this report it is appropriate to continue to adopt the going concern basis in preparing the financial statements.

Disclosure of information to Auditor

The Directors confirm that:

·      So far as each Director is aware, there is no relevant audit information of which the company’s auditor is unaware; and

·      The Directors have taken all steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Auditor

A resolution proposing the re-appointment of Crowe U.K. LLP as auditor will be put to shareholders at the Annual General Meeting.

This Directors’ Report has been approved by the Board and signed on its behalf by:

Paul Atherley

Non-Executive Chairman

30 May 2024    

Directors’ Remuneration Report

Until the Lease is entered into and the Company completes its transition to an operating company, the Company will not have a separate remuneration committee. The Board will instead periodically review the quantum of Directors’ fees, taking into account the interests of shareholders and the performance of the Company and the Directors.

The Directors who held office at 31 January 2024 are summarised as follows:

Name of Director	Position
P Atherley	Non-Executive Chairman
S Quinn	Non-Executive Director
H Pein	Non-Executive Director
V Jeckell	Non-Executive Director

Directors’ Letters of appointment

Letter of Appointment – Paul Atherley

Pursuant to a letter of appointment dated 21 September 2021 between the Company and Mr Atherley, Mr Atherley is engaged as Chairman with fees of £24,000 per annum. The appointment can be terminated by either party on three months written notice.

Letter of Appointment – Sam Quinn

Pursuant to a letter of appointment dated 21 September 2021 between the Company and Sam Quinn, Mr Quinn is engaged as a Non-Executive Director with fees of £18,000 per annum.  In addition Sam Quinn will be remunerated for additional work performed for the Company which is outside the scope of his service agreements, including consultancy and management services, at a rate of £1,000 per day subject to a maximum of 3 days per calendar month.  The appointment can be terminated by either party on three months written notice.

Letter of Appointment – Helen Pein

Pursuant to a letter of appointment dated 21 September 2021 between the Company and Helen Pein, Helen is engaged as a Non-Executive Director with fees of £18,000 per annum. In addition Helen Pein will be remunerated for additional work performed for the Company which is outside the scope of her service agreements, including project due diligence, consultancy and management services at a rate of £1,000 per day subject to a maximum of 3 days per calendar month. The appointment can be terminated by either party on three months written notice.

Letter of Appointment – Vikki Jeckell

Pursuant to a letter of appointment dated 20 November 2023 between the Company and Vikki Jeckell, Vikki is engaged as a Non-Executive Director with fees of £18,000 per annum. The appointment can be terminated by either party on three months written notice.

Pursuant to a consultancy agreement dated 21 September 2021 between the Company and Selection Capital Investments Limited, Paul Atherley is engaged as Key Personnel (as defined under the consultancy agreement) contracted to provide services to the Company in consideration of payment of £7,000 per month.

Pursuant to a consultancy agreement dated 1 October 2021 between the Company and Lionshead Consultants Limited (“Lionshead”), a company of which Sam Quinn is a director and sole shareholder, Lionshead is contracted to provide services to the Company in consideration of payment of £5,000 per month.

Pursuant to a consultancy agreement dated 22 September 2022 between Tees Valley Lithium Limited and Supply Tactics Limited (“Supply Tactics”), a company of which Vikki Jeckell is a director and 50% shareholder, Supply Tactics is contracted to provide services to TVL in consideration of payment of £20,000 per month.

Terms of appointment

The services of the Directors are provided under the terms of letters of appointments, as follows:

Director		Year of appointment	Number of periods completed	Date of current engagement letter
P Atherley		2021	3	21 September 2021
S Quinn		2021	3	21 September 2021
H Pein		2021	3	21 September 2021
V Jeckell		2023	1	20 November 2023

Consideration of shareholder views

The Board considers shareholder feedback received. This feedback, plus any additional feedback received from time to time, is considered as part of the Group’s annual policy on remuneration.

Policy for salary reviews

The Group may from time to time seek to review salary levels of Directors, taking into account performance, time spent in the role and market data for the relevant role. It is intended that there will be a salary review during the next year as the Company transitions to an operating company.

Policy for new appointments

It is not intended that there will be any new appointments to the Board in the near term. It is intended that a full review of the Board will take place on an annual basis following the Company’s full transition to an operating Company following the entering into of the Lease.

Directors’ emoluments and compensation (audited)

Remuneration attributed to the Directors’ during the year ended 31 January 2024 was as follows (all figures are stated in GBP):

Year Ended 31 January 2024:

Director		Directors fees	Salary/Consulting fees	Total remuneration
P Atherley	31 Jan 2024	59,765	84,000	143,765
S Quinn	31 Jan 2024	44,824	60,000	104,824
H Pein	31 Jan 2024	18,000	–	18,000
V Jeckell	31 Jan 2024	6,000	40,000	46,000
Total	31 Jan 2024	128,589	184,000	312,589

Year Ended 31 January 2023:

Director		Directors fees	Salary/Consulting fees	Total remuneration
P Atherley	31 Jan 2023	24,000	69,000	93,000
S Quinn	31 Jan 2023	18,000	48,600	66,600
H Pein	31 Jan 2023	18,000	–	18,000
Total	31 Jan 2023	60,000	117,600	177,600

Director incentives

In the year ended 31 January 2024, 325,000 options were granted to Directors (2023: 390,000). As at 31 January 2024, 715,000 (2023: 390,000) options issued to Directors were outstanding.

Directors’ Remuneration Policy

Pursuant to the Directors’ letters of appointment, as described above, the Directors receive fees, all payable monthly in arrears. There is currently a long-term incentive plan in operation for the Directors by way of share incentive options.

Based on the foregoing, the remuneration policy of the Group can be summarised as follows:

How the element supports our strategic objectives	Operation of the element	Maximum potential payout and payment at threshold	Performance measures used, weighting and time period applicable
Base Pay
Recognises the role and the responsibility for the delivery of strategy and results	Paid in 12 monthly instalments	Contractual sum	None
Pensions
None	n/a	n/a	n/a
Short term incentives
None	n/a	n/a	n/a
Long term incentives
Aligns directors and shareholders in share price and project development	Share options issued	TBC	1/3 of the option vest immediately; 1/3 of the options vest following the completion of the fund raising to fund construction of the first 24,000 tpa capacity at TVL’s Lithium Hydroxide project at Wilton International; and 1/3 of the options vest following commissioning of the first 24,000 tpa capacity at the project.

A remuneration committee is expected to be appointed once the Lease is entered into, to consider an appropriate level of Directors’ remuneration.

Although there is no formal Director shareholding policy in place, the Board believe that share ownership by Directors strengthens the link between their personal interests and those of shareholders.

No views were expressed by shareholders during the year on the remuneration policy of the Group.

Other matters

The Group does not currently have any short-term incentive schemes in place for any of the Directors.

The Group does not have any pension plans for any of the Directors and does not pay pension amounts in relation to their remuneration.

This Directors’ Remuneration Report has been approved by the Board and signed on its behalf by:

Paul Atherley

Non-Executive Chairman

30 May 2024    

Risk Management Report

The Group has undertaken an evaluation of the risks it is exposed to which are summarised as follows:

There is no assurance that the Group will determine that the Project is economically viable and the Lease may not be entered into

The success of the Group’s business strategy is dependent on its ability to identify sufficient suitable acquisition opportunities. Whist the Group believes that the Project presents a good opportunity, it is still in the process of evaluating such opportunity. If the Group fails to complete the development of the Project or enter into the Lease it may be left with substantial unrecovered transaction costs, potentially including fees, legal costs, accounting costs, due diligence or other expenses. Furthermore, even if an agreement is reached relating to the Project, the Group may fail to complete the Project for reasons beyond its control. Any such event will result in a loss to the Group of the related costs incurred, which could materially adversely affect subsequent attempts to identify and acquire another target business. 

Development and production activities are capital intensive and inherently uncertain in their outcome and the Group may not make a return on its investments, recover its costs or generate cash flows

The construction of industrial facilities are capital intensive. In addition, environmental damage could greatly increase the cost of operations, and various operating conditions may adversely and materially affect the levels of production. These conditions include delays in obtaining governmental approvals or consents, insufficient storage or transportation capacity or a change in demand for the product. While diligent supervision and effective maintenance operations can contribute to maximising production rates over time, production delays and declines from normal operations cannot be eliminated and may adversely and materially affect the revenues, cash flow, business, results of operations and financial resources and condition of the Company and its subsidiary undertakings from time to time (the “Group”).

Currently the Group has insufficient capital to meet the funding requirements for the development of the Project

As the Group is still evaluating the Project, it is still considering the associated costs with the development of the Project and the amount of additional capital that may be required.

The Group will need to raise additional funding in the near term to meet its working capital requirements for the next twelve months.  In addition to working capital needs, the Group is of the opinion that if it decides to proceed with the Project, the Group does not have sufficient capital in order to complete the construction of the Project and hence will be required to raise additional funds in support of project development expenditure requirements.

Based on a high-level preliminary review of expected costs the Directors anticipate that a total of approximately £250 – 300 million (excluding financing costs) of additional equity and / or debt financing will be required and subject to the outcome of the feasibility and engineering studies the Group’s confirmation to proceed with the Project to fund the evaluation, development and construction of the Project. The Group intends to raise the development costs of the Project by:

(a)  Debt finance – Any debt finance in respect of the Group for the purposes of developing and completing the Project, is likely to be subject to customary conditions precedent. As of the date of this document, the Group has not yet begun the formal process of seeking third party debt financing in respect of the Project, however the Group expects to carry out this process immediately following completion of the feasibility studies and the Group’s confirmation to proceed with the Project. 

(b)  Equity finance – In relation to any equity financing, the Group expects to engage advisers to assist the Group with its equity funding requirements. The Group has not yet begun the formal process of seeking formal engagement with advisers for equity financing in respect of the Project, however the Group expects to carry out this process in due course following completion of the feasibility and engineering studies.

Based on the Group’s informal discussions with potential debt and equity providers to date, the Directors are confident that within the period of twelve months following the date of this document the Group will be able to secure all the necessary finance required to develop and complete the Project.

The failure to secure additional financing or to secure such additional financing on terms acceptable to the Group could have a material adverse effect on the continued development or growth of the acquired business, prospects, and the financial condition and results and operations of the Group and could, ultimately lead to the insolvency of the Company or Group.

The price of lithium hydroxide is affected by factors beyond the Group’s control

If the Group proceeds with the Project, and the market price of lithium hydroxide decreases significantly for an extended period of time, the ability for the Group to attract finance and ultimately generate profits could be adversely affected. Numerous external factors and industry factors that are beyond the control of the Group that affect the price of lithium hydroxide include:

·      industrial demand;

·      levels of production;

·      rapid short term changes in supply and demand because of speculative or hedging activities; and

·      global or regional political or economic events.

The price at which the Group can sell any lithium hydroxide it may produce in the future will therefore be relevant to the future revenues that can be generated by the Group and its ability to finance the Company going forward and any adverse effects on such price could have a material adverse effect on the Group’s business, financial performance, results of operations and prospects.

The Group may be unable to hire or retain personnel required to support the Group going forward

The Group’s ability to compete depends upon its ability to retain and attract highly qualified management and technical personnel. Following completion of the Project, the Group will evaluate the personnel of the acquired business and may determine that it requires increased support to operate and manage the acquired business in accordance with the Group’s overall business strategy. There can be no assurance that existing personnel of the acquired business will be adequate or qualified to carry out the Group’s strategy, or that the Group will be able to hire or retain experienced, qualified employees to carry out the Group’s strategy.

During the development of the Project, the Group may be unable to acquire or renew necessary concessions, licenses, permits and other authorisations

The Project will require certain concessions, licences, permits and other authorisations to carry out its operations. Any delay in obtaining or renewing a license, permit or other authorisation may result in a delay in investment or development of a resource and may have a materially adverse effect on the acquired business’ results of operations, cash flows and financial condition. In addition, any concessions, licences, permits and other authorisations of the Project may be suspended, terminated or revoked if it fails to comply with the relevant requirements.

Failure to obtain (and shortages and disruptions in lead times to deliver) certain key inputs may adversely affect the Group’s operations during the development of the Project

During the development of the Project, the Group’s inability to timely acquire feedstock, strategic consumables, raw materials, and processing equipment could have an adverse impact on any results of operations and financial condition. Periods of high demand for supplies can arise when availability of supplies is limited. This can cause costs to increase above normal inflation rates. Interruption to supplies or increase in costs could adversely affect the operating results and cash flows of the Group during the development of the Project.

This Risk Management Report has been approved by the Board and signed on its behalf by:

Paul Atherley

Non-Executive Chairman

30 May 2024    

Corporate Governance Statement 

The Group observes the requirements of the Quoted Company Alliance corporate governance code (the “QCA Code”) and is in compliance with the QCA Code, save as set out below:

1.  Given the composition of the Board, certain provisions of the QCA Code are considered by the Board to be inapplicable to the Company. Specifically, the Company does not consider it necessary to have a senior independent Director and the Board will, at the outset, consist of three non-executive Directors and one non-executive chairman.

2.  The QCA Code also recommends the submission of Directors for re-election at annual intervals.  The Company Articles of Association require all directors to retire by rotation and seek reappointment by the shareholders at a general meeting every two years.

In the future, the Directors may seek to transfer from a Standard Listing to either a Premium Listing or other appropriate stock market (although there can be no guarantee that the Group will fulfil the relevant eligibility criteria at the time and that a transfer to a Premium Listing or other appropriate stock market will be achieved). However, in addition to or in lieu of a Premium Listing, the Group may determine to seek a listing on another stock exchange. Following such a Premium Listing, the Group would comply with the continuing obligations contained within the Listing Rules and the Disclosure and Transparency Rules in the same manner as any other group with a Premium Listing.

The Group does not have nomination, remuneration, audit or risk committees. The Board as a whole will instead review its size, structure and composition, the scale and structure of the Directors’ fees (taking into account the interests of shareholders and the performance of the Group), take responsibility for the appointment of auditors and payment of their audit fee, monitor and review the integrity of the Group’s financial statements and take responsibility for any formal announcements on the Group’s financial performance. Following entry into the Lease, the Board intends to put in place nomination, remuneration, audit and risk committees.

The Board has a share dealing code that complies with the requirements of the Market Abuse Regulations. All persons discharging management responsibilities (comprising only the Directors) comply with the share dealing code.

Carbon emissions

The Group currently has no trade, and two employees other than the Directors and has no office. Therefore, the Group has minimal carbon emissions and it is not practical to obtain emissions data at this stage.

Board of Directors

The Group has a Board it believes is well suited for the purposes of implementing its business strategy, combining skill sets for the assessment of investment and acquisition of royalties and streams in the mining sector.

The Directors are responsible for carrying out the Group’s objectives, implementing its business strategy and conducting its overall supervision. Acquisition, divestment and other strategic decisions will all be considered and determined by the Board.

The Board will provide leadership within a framework of prudent and effective controls. The Board will establish the corporate governance values of the Group and will have overall responsibility for setting the Group’s strategic aims, defining the business plan and strategy and managing the financial and operational resources of the Group.

The Board aims to hold meetings on a quarterly basis and is regularly in contact to discuss prospective acquisition opportunities.

The Articles of the Company contain express provisions relating to conflicts of interest in line with the Companies Act 2006.

Shareholder communications

The Group uses its corporate website (www.alkemycapital.co.uk) to ensure that the latest announcements, press releases and published financial information are available to all shareholders and other interested parties.

The AGM is used to communicate with both institutional shareholders and private investors and all shareholders are encouraged to participate. Separate resolutions are proposed on each issue so that they can be given proper consideration and there is a resolution to approve the Annual Report and Accounts. Notice of the AGM is sent to shareholders at least 21 days before the meeting and the results are announced to the London Stock Exchange and are published on the Company’s website.

Paul Atherley

Non-Executive Chairman

30 May 2024    

Directors’ Responsibility Statement 

The Directors are responsible for preparing the Annual Report and the Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with UK Adopted International Accounting Standards (“IAS”). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the profit or loss for that period.

In preparing these financial statements, the Directors are required to:

1.         select suitable accounting policies and then apply them consistently;

2.         make judgements and accounting estimates that are reasonable and prudent;

3.         state whether applicable IASs as adopted by the United Kingdom have been followed, subject to any material departures disclosed and explained in the financial statements; and

4.         prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the Financial Statements and the Directors Remuneration Report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and Group,, and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

They are also responsible to make a statement that they consider that the Annual Report and Financial Statements, taken as a whole, is fair, balanced, and understandable and provides the information necessary for the shareholders to assess the Group’s position and performance, business model and strategy.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the United Kingdom. governing the preparation and dissemination of the Financial Statements may differ from legislation in other jurisdictions.

Directors’ responsibility statement pursuant to disclosure and Transparency Rule

Each of the Directors, whose names and functions are listed within the Board of Directors confirm that, to the best of their knowledge:

1.         the financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the United Kingdom, give a true and fair view of the assets, liabilities, financial position and loss of the Company and Group; and

2.         the Annual Report and financial statements, including the Strategic Report, includes a fair review of the development and performance of the business and the position of the Company and Group, together with a description of the principal risks and uncertainties that they face.

Approved by the Board on 30 May 2024

Paul Atherley

Non-Executive Chairman

Independent auditor’s report to the members of Alkemy Capital Investments Plc

Opinion

We have audited the financial statements of Alkemy Capital Investments Plc (the “company”) and its subsidiaries (the ‘group’) for the year ended 31 January 2024 which comprise consolidated statement of comprehensive income, consolidated and company statement of financial position, consolidated and company statement of changes in equity, consolidated and company statement of cash flows, and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and UK-adopted international accounting standards.

In our opinion:

·      the financial statements give a true and fair view of the state of the group’s and of the company’s affairs as at 31 January 2024 and of the Group’s loss for the year then ended;

·      the financial statements have been properly prepared in accordance with UK-adopted international accounting standards; and

·      the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group and the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to the section headed Going Concern at note 2 of the financial statements, which details factors the Group has considered when assessing the going concern position. As detailed in note 2 the uncertainty surrounding the availability of funds to finance the commercial development of the group’s projects indicates the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting included:

·      Discussions with management in relation to the future plans of the Group and Company.

·      Reviewing activity after the year end to the date of signing the financial statements.

·      Reviewing the directors’ going concern assessment including the worst-case scenario cash flow forecast that covers at least 12 months from the date we expect to sign the audit report.

·      Assessing the cash flow requirements of the Group and Company based on forecast capital and administrative expenditure for 12 months after the date of signing.

·      Understanding what forecast expenditure is committed and what could be considered discretionary.

·      Considering the liquidity of existing assets of the statement of financial position.

·      Considering the options available to management for further fundraising, or additional sources of finance.

·      Considering potential downside scenarios and the resultant impact on funding requirements and the Company and Group’s ability to raise such funds.

·      Considered the likelihood of receipt of fundraising.

·      Evaluating the reliability of the data underpinning the forecast cash flows.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Overview of our audit approach

Materiality

In planning and performing our audit we applied the concept of materiality. An item is considered material if it could reasonably be expected to change the economic decisions of a user of the financial statements. We used the concept of materiality to both focus our testing and to evaluate the impact of misstatements identified.

Based on our professional judgement, we determined overall materiality for the financial statements as a whole to be £100,000 (2023: £125,000), based on 5% of loss before taxation. Materiality for the parent company financial statements as a whole was set at £46,000 (2023: £28,000) based on approximately 5% of loss before taxation. We consider this basis of determining materiality to be appropriate for a holding entity of this nature.

We use a different level of materiality (‘performance materiality’) to determine the extent of our testing for the audit of the financial statements.  Performance materiality is set based on the audit materiality as adjusted for the judgements made as to the entity risk and our evaluation of the specific risk of each audit area having regard to the internal control environment.  Performance materiality was set at 70% of materiality for the financial statements as a whole, which equates to £70,000 (2023: £87,500) for the group and £32,200 (2023: £35,000) for the parent.

Where considered appropriate performance materiality may be reduced to a lower level, such as, for related party transactions and directors’ remuneration.

We agreed with the Board to report to it all identified errors in excess of £5,000 (2023: £6,250). Errors below that threshold would also be reported to it if, in our opinion as auditor, disclosure was required on qualitative grounds.

Overview of the scope of our audit

Our audit was scoped by obtaining an understanding of the group and its environment, including the group’s system of internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of management override of internal controls, including assessing whether there was evidence of bias by the directors that may have represented a risk of material misstatement.

We identified two significant components, being the parent company and its principal operating subsidiary, Tees Valley Lithium Limited. The base of operations is in the United Kingdom, which is where the head office is. Our group audit strategy focused on the significant components which were subject to a full scope audit.

The group is accounted for from one central location, the United Kingdom. The audit of the group was performed by Crowe in the UK. The consolidation was also subject to a full scope audit performed by the Group audit team.

The remaining components of the group were considered non-significant. All balances material to the group were audited and the remaining balances subject to analytical procedures by the Crowe audit team.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.

Key audit matter

How our scope addressed the key audit matter

Capitalisation of intangible assetsThe group continues to invest in the planned construction of LHM refinery in Wilton International Chemicals Park, Teeside.Determining whether the cost of development meets capitalisation criteria requires significant judgement based on the requirements of IAS 38 Intangible Assets.We therefore consider the inappropriate capitalisation of development costs to be a key audit matter. Refer to notes 2 and 10.

We reviewed the accounting policies adopted by management in relation to the intangible assets and whether they are consistent with IFRS and meet the criteria as set out in IAS38, para 31.We obtained an understanding of the design and implementation of systems and controls relevant to impairment assessments of intangibles.We tested a sample of capitalised invoices to ensure that these were capital in nature and related to the underlying asset.Based on our work performed, we concluded that the carrying value of the intangible assets is reasonable after proposed audit adjustments.

Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on this matter individually and we express no such opinion.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion based on the work undertaken in the course of our audit:

·      the information given in the strategic report and the directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

·      the directors’ report and strategic report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

·      adequate accounting records have not been kept by the group and company, or returns adequate for our audit have not been received from branches not visited by us; or

·      the group and company financial statements and the part of the directors’ remuneration report to be audited are not in agreement with the accounting records and returns; or

·      certain disclosures of directors’ remuneration specified by law are not made; or

·      we have not received all the information and explanations we require for our audit.

Responsibilities of the directors for the financial statements

As explained more fully in the directors’ responsibilities statement set out on page 23, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group’s and the parent company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and company and the procedures in place for ensuring compliance in the jurisdiction where the Group and company operate, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006 and relevant taxation legislation.

We assessed the nature of the group’s business, the control environment and performance to date when evaluating the incentives and opportunities to commit fraud.

We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be the override of controls by management to manipulate financial reporting and misappropriate funds. Our procedures to address the risk of management override included:

·      enquiries of management about their own identification and assessment of the risks of irregularities;

·      review of the system for the generation, authorisation and posting of journal entries;

·      obtaining supporting evidence for a risk-based sample of journals, derived using a data analytics tool;

·      audit of significant transactions outside the normal course of business, or those that appear unusual;

·      considering audit adjustments identified from our audit work for evidence of bias in reporting;

·      considering significant estimates and judgements made by management for evidence of bias, and performing retrospective reviews where applicable;

·      reviewing the other information presented in the annual report for fair representation and consistency with the audited financial statements and the information available to us as the auditors.

·      Review of minutes of board and committee meetings throughout the period and enquiries of management as to their identification of any non-compliance with laws or regulations, or any or potential claims of fraud;

Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with the ISAs (UK). The potential effects of inherent limitations are particularly significant in the case of misstatement resulting from fraud because fraud may involve sophisticated and carefully organized schemes designed to conceal it, including deliberate failure to record transactions, collusion or intentional misrepresentations being made to us.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Other matters which we are required to address

We were appointed by Board on 27 March 2022 to audit the financial statements for the period ending 31 January 2022. Our total uninterrupted period of engagement is three years, covering the periods ending 31 January 2022 to 31 January 2024.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the company and we remain independent of the group’s and the company in conducting our audit.

Our audit opinion is consistent with the additional report to the Board.

Use of our report

This report is made solely to the Group’s and company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the group’s and company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the group and company and the group’s and company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Matthew Stallabrass

Senior Statutory Auditor

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

London

 30 May 2024

Alkemy Capital Investments plc (LON:ALK) (JV2:FRA), has announced that it will host a shareholder webinar and Q&A on Wednesday 1^st November 2023 at 12pm UK time.

The call will be hosted by Alkemy’s corporate broker VSA Capital Limited, who will discuss recent key updates on the Company’s strategy in the UK and Australia as well as feedstock / offtake progress with Non-Executive Chairman Paul Atherley.

Registration Details:

A recording of the webinar will also be made available on the Company’s website following the event. Investors are invited to register using the following link:

https://us02web.zoom.us/webinar/register/WN_7Gg2trFtRnWdCcsAW6BXmg

Shareholders who wish to do so are invited to submit questions via email to: [email protected]

Company Newsletter

Interested investors are also invited to sign up for Alkemy Capital Newsletter at the following link:

https://alkemycapital.us6.list-manage.com/subscribe?u=2a0f2ca6be8db966f66a0981a&id=3ba1c77773

Alkemy Capital Investments plc (LON:ALK) (JV2:FRA) has announced that international investment banking and broking firm, VSA Capital, has published an updated research note on the Company.

The research note follows recent announcements from Alkemy regarding advancements on feedstock negotiations for Tees Valley Lithium’s lithium hydroxide refinery in Teesside and the completion of a class 4 feasibility study for Port Hedland Lithium’s lithium sulphate refinery located at the Boodarie Strategic Industrial Area in Western Australia.

VSA commented:

“The progress is positive and as yet the market has not priced in success. We continue to believe that the company’s strategy positions it to achieve these major milestones that would unlock significant value and expedite the project financing process and options.

Currently, little of the recent progress in terms of engineering studies, planning permission and feedstock has been reflected in the share price.

We reiterate our Speculative Buy recommendation and increase our target price to £15.30/sh.“

The initiation note is available to view here: www.alkemycapital.co.uk/investors/analyst-coverage

Alkemy Capital Investments plc (LON:ALK) (JV2:FRA) has provided an update on the supply of feedstock and the sale of lithium products from its proposed facilities at the Teesside Freeport, UK and Port Hedland, Western Australia.

HIGHLIGHTS:

·    Following extensive technical and commercial due diligence, Tees Valley Lithium has been shortlisted by a major automotive OEM as the preferred European lithium refiner for a portion of its lithium supply chain

·    The due diligence focussed on Tees Valley Lithium’s ability to import a lithium sulphate from its Port Hedland facility in Western Australia and the conversion into battery grade lithium hydroxide or carbonate at an internationally competitive price

·    Discussions are also advancing well with third parties, including other automotive OEMs, for access to Tees Valley Lithium’s multi-train facilities using either an intermediate lithium sulphate produced at Port Hedland in Australia, or lithium sulphate produced elsewhere for refining into battery grade lithium products to access international markets via the Teesside Freeport

·    Discussions are ongoing with two major trading groups to supply technical grade carbonate from South America and elsewhere to feed directly one of the trains at Tees Valley Lithium’s Wilton refinery to produce battery grade lithium products on a toll treatment basis.

Strong interest in Alkemy’s lithium refining strategy

The high level of interest in Alkemy’s projects in the UK and Australia highlights the need for lithium refining solutions for both European and global markets.

Alkemy’s two stage, multiple-train refinery design is able to accommodate different feedstock sources on a train-by-train basis, thereby opening up various feedstock, partnership and funding options.

Continued upstream investment by automotive OEMs

Recently announced transactions highlight the movement upstream by OEMs in order to secure raw material supplies for their future battery demands.  These investments, and the number of lithium mining projects in development, are expected to increase the supply of raw materials for the battery transition.

The growing volume of lithium concentrates produced will require additional refining capacity to produce the high purity materials required by cathode manufacturers.

Despite parallel midstream investments by OEMs, this mid-stream refining capacity continues to be a potential bottleneck for the global lithium supply chain.

Alkemy Capital Investments shortlisted as preferred lithium refinery for major OEM

TVL is in discussions with several OEMs, encompassing proposals ranging from sourcing of raw materials and refining of those materials to lithium hydroxide, to toll treatment of lithium raw materials acquired or to be acquired by the OEMs.

Alkemy is pleased to report that following a detailed review of its proposed Boodarie and Wilton refineries by a global automotive OEM, Alkemy has been shortlisted as a favoured refining partner for lithium hydroxide and carbonate.

Being shortlisted by major industrial players validates Alkemy’s two-stage processing strategy, the engineering studies conducted to date, and our team’s execution capability. Alkemy is continuing to work with these OEMs to satisfy their requirements with a view to concluding legally binding agreements as soon as possible.

OEMs have also confirmed the ability to benefit from provisions of the US-Australia Climate, Critical Minerals, and Clean Energy Transformation Compact and the European Critical Minerals Act and Batteries Regulations.

Feedstock, offtake and partnership discussions progressing well

Alkemy continues in advanced discussions with a number of potential key feedstock suppliers, including several industry-leading lithium miners, well known automakers, global commodity trading houses and battery recyclers.

In the longer term, recycling of end-of-life batteries is expected to provide a significant supply of lithium materials, albeit requiring separation and refining for production of new batteries.  TVL’s process has been designed specifically to allow for reprocessing of recycled material, and in due course, the company expects an increasing proportion of this feedstock to supply its Wilton refinery.

Alkemy Capital Investments is also advancing discussions with several other potential customers for its lithium hydroxide, including major European gigafactories and chemicals companies and expects significant offtake and/or partnership deals to be entered into in due course.

These customers are increasingly focussed on price, transparency and low embedded carbon, when sourcing high grade lithium products and have indicated their desire to partner with Alkemy due to our market leading credentials in these areas.

Sam Quinn, Director of Alkemy, commented:

“We are continuing discussions for the refining of lithium raw materials with several key globally significant feedstock suppliers and end customers, and we are delighted at being shortlisted as a favoured refining partner by a global automotive OEM.

The support received from third parties including major OEMs provides further validation of our proposed lithium refining strategy. The rapid completion of due diligence to the satisfaction of certain OEMs is testament to the quality of the work undertaken by our commercial and technical teams.

Our focus remains on supporting our potential partners’ lithium strategies and concluding commercial negotiations.  We look forward to updating the market in due course as these arrangements become binding.”

Alkemy Capital Investments plc (LON:ALK) (FRA:JV2) and its wholly-owned subsidiary Tees Valley Lithium have announced that TVL together with Weardale Lithium has secured a joint funding package of approximately £613,000, which includes a grant of approximately £430,000 from Innovate UK.

Innovate UK is the UK’s national innovation agency. It drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas.

The funding provided under the Launchpad: Net Zero, CR&D Tees Valley, R2 competition supports outstanding innovation projects that grow activities in the Net Zero innovation cluster centred on Tees Valley and supports the Government’s goals in the Levelling Up White Paper. Through collaborative research and development, TVL and WL are building upon the Memorandum of Understanding signed last year to evaluate the potential synergies of both producing and refining lithium in the North East of England.

The project is specifically concerned with novel methods for the production and refinement of lithium extracted from geothermal brine resources in the context of developing an integrated and robust route from ‘borehole to battery’, all within the North-East region. The funding will advance feasibility studies and scale-up activities to further a battery-supply chain industrial hub and include the evaluation of the potential for WL to supply lithium to TVL for refining.

Sam Quinn, Director of Tees Valley Lithium, said:

“We are delighted to have received this grant from Innovate UK and look forward to our collaboration with Weardale as we seek to bring back high value manufacturing to the North East and help develop a potential UK-based supply chain for the lithium sector.

At Wilton in the Teesside Freeport, TVL is establishing Europe’s largest low-carbon merchant lithium hydroxide refinery. Each of the four trains at Wilton will take feedstock in the form of lithium sulphate or crude carbonate, to produce 24,000 tpa of battery-grade lithium hydroxide (or carbonate equivalent) feeding directly into the European and international battery cell manufacturers.”

Alkemy Capital Investments is seeking to establish the world’s leading independent and sustainable lithium hydroxide production by developing state-of-the-art lithium sulphate and lithium hydroxide facilities in Australia and the UK.

Alkemy, through its wholly owned UK subsidiary Tees Valley Lithium, has secured a 9.6 ha brownfields site with full planning permission at the Wilton International Chemicals Park in Teesside, a major UK Freeport, to build the UK’s first and Europe’s largest lithium hydroxide processing facility. Tees Valley Lithium has completed a Class 4 Feasibility Study for its proposed lithium hydroxide refinery which will process feedstock imported from various sources to produce 96,000 tonnes of premium, low-carbon lithium hydroxide annually, representing around 15% of Europe’s projected demand.

Alkemy, through its wholly owned Australian subsidiary Port Hedland Lithium, has secured a 43.7 ha site near Port Hedland, Western Australia to build a world-class sustainable lithium sulphate refinery that will provide reliable feedstock for Tees Valley Lithium’s refinery. Port Hedland Lithium has completed a Class 4 Feasibility Study for its proposed lithium sulphate refinery, each train of which will process spodumene concentrate to produce 40,000 tonnes of lithium sulphate annually.

Alkemy Capital Investments plc (LON:ALK) and its wholly-owned Australian subsidiary Port Hedland Lithium Pty Ltd has announced the completion of a Feasibility Study for Australia’s first stand-alone lithium sulphate processing facility, located at the Boodarie Strategic Industrial Area, just outside of Port Hedland, Australia’s largest export port.

The Feasibility Study has been produced ahead of schedule in response to the due diligence requirements of certain global OEMs looking to utilise and contract with Alkemy’s refineries.

HIGHLIGHTS: 

·  Class 4 Feasibility Study completed by Wave International for Australia’s first stand-alone lithium sulphate processing facility at the Boodarie SIA, Port Hedland

·   The Boodarie refinery has been designed to process spodumene concentrate from various potential Australian mines, producing a lithium sulphate monohydrate (LSM) for TVL’s Wilton refinery in the UK

·    Initial capital cost for Train 1 of US$322 million

·    Gross revenues per annum for Train 1 of US$396 million

·    Internal rate of return (IRR) of 18%

·    Post-tax net present value (NPV) for Train 1 of $293 million

·    NPV for 4 Trains of US$1.0 billion, which combined with Wilton’s NPV of US$2.7 billion gives a total NPV of US$3.7 billion across both projects when all 4 Trains are built

·    Flora and Fauna baseline survey completed for Boodarie as part of the required environmental approvals

Alkemy’s strategy, through its two wholly-owned subsidiaries, PHL and Tees Valley Lithium Ltd (“TVL”), is to produce a high value, low carbon intermediate lithium sulphate product in Australia for onward processing in the UK into a premium battery grade product, for sale to Tier 1 customers in the fast growing premium European market.

PHL is developing a stand-alone merchant lithium sulphate refinery at the Boodarie SIA located just south of the proposed new Lumsden Point Critical Minerals Wharf in Port Hedland, the world’s largest export port by volume, with established road and rail infrastructure connections to Western Australia’s world-class hard-rock lithium resources.

Powered by local renewable energy, each of the four proposed lithium sulphate trains at Boodarie will refine approximately 180,000 tpa of locally mined spodumene concentrate to produce 40,000 tpa of lithium sulphate, with lithium content equivalent to 24,000 tpa lithium hydroxide. It is anticipated that lithium sulphate produced by PHL will be processed further by TVL before sale to end customers, although PHL will retain flexibility to provide lithium sulphate to third parties should demand arise.

Conducting the first part of the refining process in Australia minimises the quantity of waste material exported and reduces both the shipping cost and the embedded carbon of the resulting lithium products.

At Wilton, in the Teesside Freeport in the north-east of the UK, TVL is establishing Europe’s largest low-carbon merchant lithium hydroxide refinery. Each of the four trains at Wilton will take feedstock in the form of lithium sulphate or crude carbonate, to produce 24,000 tpa of battery-grade lithium hydroxide (or carbonate equivalent) feeding directly into the European and international battery cell manufacturers.

This new Pilbara to Teesside supply chain epitomises the new critical minerals supply chains made possible under the recently signed free trade agreement between Australia and the UK and will leverage the competitive strengths of Australia in mining and minerals processing and the UK in chemical refining.

The Feasibility Study has been prepared by Wave International, a leading engineering consultancy firm with significant experience in developing lithium refinery projects worldwide. It is based on a merchant lithium sulphate plant comprising up to four trains over a 30-year life.

Economic Evaluation

The Feasibility Study economic evaluation report clearly demonstrates the robustness of developing a stand-alone lithium sulphate refinery with low capital and processing costs, a low carbon footprint, and strong cash flow generation capacity.

The preliminary economics for Train 1 of the Boodarie refinery, both as a stand-alone project and combined with Train 1 of the Wilton refinery, are set out below:

Table 1 – Project Economics

Boodarie – Economic Summary		1 Train
Life of Project	years	30
Spodumene concentrate treated	kt pa	180
LSM produced	kt pa	40
Gross revenue	$m pa	396
Capital cost (incl. contingency)	$m	322
Post tax NPV	$m	293
Post tax IRR	%	18%
Payback period	years	5.4

Wilton – Economic Summary		1 Train
Life of Project	Years	30
LSM treated	kt pa	40
LHM produced	kt pa	24
Gross revenue	$m pa	600
Capital cost (incl. contingency)	$m	288
Post tax NPV	$m	936
Post tax IRR	%	40%
Payback period	years	2.6

Boodarie and Wilton – Combined Economics		1 Train
Life of Project	Years	30
Spodumene concentrate treated	kt pa	180
LHM produced	kt pa	24
Gross revenue	$m pa	600
Capital cost (incl. contingency)	$m	611
Post tax NPV	$m	1,228
Post tax IRR	%	28%
Payback period	years	3.2

Notes:

– the model uses a long-term lithium sulphate price of $10,000/t, a long term SC6 price of $1,500/t and a long-term lithium hydroxide price of $25,000/t

– all currency figures are USD

Expansion Capacity of up to 4 Trains per Refinery

The Feasibility Studies for both Wilton and Boodarie have designed and modelled refineries of up to 4 Trains. For Boodarie, the economic model across 4 trains shows an NPV of $1.0 billion with gross revenues per annum of $1.6 billion and an IRR of 18%.

When combined with 4 Trains at Wilton, the economic model for both projects shows an NPV of $3.7 billion with gross revenues per annum of $2.4 billion and an IRR of 25%.

Flora, Vegetation and Fauna Assessment

In May 2023, PHL engaged AECOM Australia to complete an ecological baseline survey for the Boodarie lithium sulphate refinery site.  The survey included a detailed flora and fauna survey of the Boodarie site and the preparation of a full report in accordance with the Environmental Protection Act 1986 and other applicable regulations and standards. 

The survey identified a number of native species consistent with the wider regional flora and fauna, however importantly no priority or threatened ecological communities or species were recorded during the survey. This baseline ecological assessment recorded and mapped significant environmental values on the Boodarie site and will provide important information for the full environmental approval application to be lodged as part of the Port Hedland lithium sulphate refinery project development.

Wave International CEO, Ryan Hanrahan commented:

“The LSM plant at Boodarie is a strong first step to introducing flexibility into a somewhat rigid existing supply chain. We are seeing first hand exceptionally high interest in the model of intermediate chemicals from the end user and investment community, and this plant is no exception.

We are pleased to continue to support Alkemy and PHL through the final stages of due diligence with their partners, now that the feasibility study is completed.”

Sam Quinn, Director of Alkemy and Port Hedland Lithium, commented:

“The completion of the Boodarie Feasibility Study is another major milestone reached for Alkemy and its 100% owned subsidiary Port Hedland Lithium.

We are moving quickly to establish a major independent and sustainable lithium sulphate producer at the Boodarie Strategic Industrial Area in Port Hedland and are pleased with the validation that this independent feasibility study brings to our project.

We continue to make excellent progress in advancing both of our lithium refineries, including advancing discussions with several key globally significant potential feedstock suppliers and customers and look forward to updating the market in due course as these discussions conclude.”

APPENDIX – FEASIBILITY STUDY SUMMARY

PROJECT BACKGROUND AND STRATEGY 

In January 2023, the Western Australian Government allocated Alkemy an area of approximately 43.7 hectares within the Boodarie SIA for the construction of its Port Hedland refinery. Wave International and GHD have been engaged to undertake the engineering and planning approvals for the Boodarie operation.

Port Hedland, Western Australia is the largest bulk export port in the world and one of the largest container ports in Australia and with the planned US$470 million multi-user logistics hub at Lumsden Point, it is expected to become the world’s biggest export port for lithium.

Alkemy has been allocated land along with BP, POSCO, Fortescue Metals and Alinta Energy with the aim of making Boodarie part of an A$70 billion globally competitive Pilbara green industrial precinct. 

Building the Boodarie lithium sulphate refinery will provide Australian spodumene producers a complete mid-stream lithium refining solution with direct access to the premium European market through TVL’s refinery at the Wilton International Chemicals Park in Teesside, UK.

Through the first trains at both the Boodarie lithium sulphate refinery and the Wilton lithium hydroxide refinery, Alkemy will have the capacity to convert 180,000 tpa of lithium spodumene to 24,000 tpa of lithium hydroxide and aims to become the world’s lowest embedded carbon lithium refiner.

Alkemy’s strategy is to be a mid-stream refiner producing battery grade lithium chemicals to the electric vehicle and energy stationary storage markets. In doing so, Alkemy is developing its two key assets in Wilton and Boodarie. The advantages of the split refinery strategy are as follows:

·    the Wilton refinery takes advantage of the Teesside Freeport location, allowing certain financial and trade advantages to the European, UK and US markets.

·    the finished product is a high purity chemical, or pseudo commodity, and the UK has a long history in chemical manufacturing. The project takes advantage of an existing skilled workforce in chemical processing.

·    the Wilton refinery can take advantage of multiple feed sources, being either lithium sulphate or other lithium compounds that can be converted to lithium sulphate and apply either the conventional flowsheet or TVL’s electrochemical flowsheet to produce lithium hydroxide.

·    PHL’s plant provides access to Australian hard rock spodumene mines located in the Pilbara, which is geographically favourable for lithium bearing pegmatites and hosts a number of existing globally significant spodumene operations.

·    PHL’s plant will produce lithium sulphate, which has a much higher lithium content than spodumene concentrate and will reduce the volume of material (and specifically, non-lithium material) shipped to Wilton. This reduces the end-to-end lithium supply chain carbon footprint and avoids downstream issues with managing high volumes of non-lithium material.

·    The transport of LSM not only reduces the mass of material moved over ocean, but also avoids a significant residue handling issue at the destination. There is no identified true solution to residue management in the UK, and ALK’s model wholly addresses this issue.

·    PHL’s Boodarie plant takes advantage of existing industry knowledge and skills in Western Australia, with three other LHM plants operating the same front end process, either in operation or under construction in Western Australia.

Aerial view of the Boodarie Strategic Industrial Area, Port Hedland

PROCESS AND FLOWSHEET DEVELOPMENT

The flowsheet is based on a conventional, proven process route for processing spodumene. The process design is based on extensive industry knowledge on Wave International’s background knowledge of lithium sulphate circuits and the extensive experience of the project team who have undertaken testing on multiple global spodumene concentrates.

The design is based on the same fundamental chemistry and equipment as the three other lithium hydroxide plants in Australia, and the majority of Chinese plants. Process validation testwork will take place with specific feedstocks as part of ongoing future due diligence activities.

A final lithium sulphate product with a purity of 95-97% Li2SO4.H2O is targeted from the process design. The TVL impurity removal process is designed to remove impurities and accept feedstock of industrial grade lithium sulphate.

In Wave International’s experience, a plant of this configuration is capable of producing much lower impurities, but the design of the TVL plant in Wilton has been based on various feedstocks and hence conservative impurity removal circuit inclusions.

LOCATION

The Boodarie SIA is an optimal site for a lithium sulphate refinery for a number of reasons:

·    proximity to existing and planned spodumene producers in the Pilbara;

·    well located for the import of spodumene production from other parts of Australia for conversion to primary lithium sulphate prior to export to the UK;

·    access to critical infrastructure including skilled labour, the Great Northern Highway, the 210MW Alinta gas fired power station operating in the Boodarie SIA, existing gas pipeline infrastructure, and existing water pipeline infrastructure and telecommunications;

·    adjacent to Port Hedland, the world’s largest bulk export port and one of Australia’s largest container ports; and

·    ability to source renewable energy and energy storage from new developments planned in the region, delivering low carbon energy sources for the new lithium sulphate plant.

ENVIRONMENT, PERMITTING AND APPROVALS

Primary approvals required for the project include Environmental Protection Act Part IV approval and Environmental Protection Act (EP Act) Part V works approval.

Under Part IV of the EP Act, development proposals that have the potential to result in significant impact on the environment are required to be referred to the Environmental Protection Authority (EPA). In deciding whether a proposal will be subject to a formal EIA process, the EPA considers the environmental significance of potential impacts that may result from the implementation of the proposal. Developments assessed by the EPA must receive Ministerial Approval in order to proceed. Various studies will be required to be completed to support the Part IV approvals documentation, including:

·    Land: flora and vegetation

·    Land: terrestrial environmental quality

·    Land: terrestrial fauna

·    Water: inland waters

·    Air: air quality

·    Air: greenhouse gas emissions

·    People: social and surroundings

A Department of Water and Environmental Regulation Works Approval for the project will be submitted on the basis that a number of the proposed activities are anticipated to trigger the definition of Prescribed Premise Categories under the Environmental Protection Regulations 1987.

Other secondary approvals to operate will be required including various dangerous goods licenses.

Where possible, PHL will seek to gain approvals for completion of early works so as to optimise the project delivery schedule.

A binding lease agreement for the Boodarie site will also be required to be executed prior to the commencement of construction based on the option to lease currently being negotiated with DevelopmentWA.

OPERATING AND CAPITAL COSTS

An operating cost estimate has been prepared for the project and was developed as a bottom-up estimate with key values taken from the Feasibility Study’s economic evaluation report.

All significant and measurable items have been calculated; however, smaller items are factored as per industry practice. The level of effort for each of the line items meets the requirements for a Class 4 Feasibility Study estimate.

Based on the engineering development and operational management work progressed, a Capital Cost Estimate has been prepared for the project.

The Capital Cost Estimate was developed to meet the requirements of a Class 4 estimate as defined by the American Association of Cost Engineers’ Cost Estimation and Classification System (as applied for mining and minerals processing industries) and represents a nominal accuracy range of ±25%, with a contingency of 15%. All cost data is in USD.

The Capital Cost Estimate presents the capital requirements to engineer, procure, construct and commission the project.

WORKFORCE

At a steady state of production the Company anticipates to employ up to 125 people per train.

During the construction phase it is anticipated that around 300 direct jobs will be created for train 1 alone at peak construction.

FEEDSTOCK AND OFFTAKE

The plant is set up to accommodate multiple feed sources of spodumene concentrate from mining operations in Western Australia which is currently the world’s leading source and supplier of spodumene. This diversity will provide flexibility of supply and de-risks the project. 

Alkemy is in advanced discussion with a number of potential feedstock suppliers including some of the world’s largest miners and OEMs and is confident to be able to secure sufficient spodumene concentrate for the project.

The Feasibility Study will be utilised for completion of due diligence activities with various potential feedstock suppliers as a planned next step to finalising binding agreements.

Alkemy is also in discussions for long-term offtake agreements with OEMs and battery manufacturers and is confident that it will secure customers for 100% of its production. 

TIMELINE

PHL anticipates first production for the Boodarie refinery during H1 2026. Significant milestones include the following:

·    Permitting:   Q4 2023 – Q4 2024

·    Financing:   Q4 2023-Q1 2024

·    Main Construction (subject to financing):  Q1 2025 to Q1 2026.

·    Commercial production:  Q2 2026

Wave International, one of Australia’s leading lithium refining engineers, hosted Alkemy Capital Investments plc (LON:ALK) on a visit to Western Australia recently, as part of the studies for Australia’s first stand-alone Lithium Sulphate refinery to be located at the Boodarie Strategic Industrial Area, just outside Port Hedland, Australia’s largest export port.

During the visit, Chairman Paul Atherley and Commercial Manager Alex Della Bosca had the opportunity to view by air lithium the three main refineries currently under construction in Western Australia, one of which Wave has designed and engineered, to see how the proposed Boodarie and Tees Valley UK refineries will compare.

The study is considering two trains at Boodarie. Each train will have the capacity to process approximately 180,000 tonnes of spodumene concentrate SC6 into around 40,000 tonnes of low carbon Lithium Sulphate annually for export via the nearby Lumsden Point Critical Minerals Wharf at Port Hedland.

At the Tees Valley Lithium refinery, located in the Wilton International Chemical Park in the Teesside Freeport UK, the Lithium Sulphate will be refined into 24,000 tonnes of battery-grade Lithium Hydroxide annually.

At full capacity, fed with Lithium Sulphate from the proposed two trains at Boodarie, along with the proposed technical grade carbonate feedstock from South America, Tees Valley Lithium is being designed to produce 96,000tpa of battery-grade Lithium Hydroxide for the European and international markets.

The first train at Wilton will be the next generation of the conventional design deployed across the three Australian plants currently in development, and will be powered by 100% certified green energy, becoming Europe’s largest low-carbon lithium refining solution.

Wave International CEO, Ryan Hanrahan commented: “Europe, the UK and the USA all have ambitions for localisation of supply chains as far upstream as possible, but do not have the fortune of Australia’s geology.

Wave have been examining intermediary products for many years now, and this approach offers unique opportunities for these countries to meet their localisation goals. It also provides Australia an opportunity to ensure its natural resources are deployed to all global markets, providing stability and diversity to Australian producers.

The Port Hedland plant will provide direct access to these markets to current operations and future discoveries.”

A similar sentiment echoed by the Critical Minerals Association Australia: “Shipping spodumene across the globe (and primarily to China) adds little to the climate and responsible supply chain debate – spodumene is 95% waste.  Australia now needs to evolve past being China’s quarry and diversify its income sources to build a better future for all Australians.”

Alkemy Capital’s Tees Valley Lithium’s Hydroxide plant is on track to begin production in 2025 and PHL’s Sulphate plant is scheduled to begin production in 2026.

Alkemy Capital Investments plc (LON:ALK, FRA: JV2) is focussed on developing projects in the energy transition metals sector. Alkemy’s wholly-owned subsidiary Tees Valley Lithium (TVL) is developing a state of the art lithium hydroxide plant at Teesside, UK. TVL is Europe’s largest independent and sustainable lithium hydroxide producer.

Alkemy Capital Investments plc (LON:ALK:) (JV2:FRA) has announced that it has completed a £1.35 million fundraise. As part of this Alkemy has conditionally placed 657,711 ordinary shares at a placing price of £1.40 each to raise gross proceeds of c.£921,000, including a £10,000 participation by Alkemy director Helen Pein. Whilst legally restricted from participating directly in the Placing at this time, Paul Atherley and Sam Quinn have also agreed to contribute though the advance of unsecured, interest free loans of £430,000 in aggregate, with such amounts expected to be applied to subscribe for new shares at the Placing Price as soon as legally permissible as set out below.

The net proceeds of the Fundraise will be used to continue to advance the Company’s projects and will provide sufficient working capital for the Company over the next twelve months. The Company continues to advance discussions and negotiations with counterparties for lithium feedstock. The major shareholders of the Company have also committed to provide any additional working capital that may be required by the Company to enable it to reach this significant milestone.

The Directors of Alkemy have together contributed to the Fundraise in the amount of £440,000, with Helen Pein participating in the amount of £10,000 in the Placing. Paul Atherley and Sam Quinn have also both contributed in the amounts of £330,000 and £100,000, respectively, however they are members of a concert party under the City Code on Takeovers and Mergers (the “Takeover Code”) (which in aggregate currently holds 49.49% of the Company’s issued share capital) and therefore their direct participation in the Placing would have triggered a mandatory offer for the Company under Rule 9 of the Takeover Code. As such, Mr Atherley has agreed that an amount of £330,000 currently owing to him by the Company shall be treated as an advance in the form of an unsecured, interest free loan and Mr Quinn has agreed to advance the Company £100,000 in the form of an unsecured, interest free loan. The Company has agreed with Mr Atherley and Mr Quinn that the amounts to be repaid to them under such loans should be applied for the subscription of 235,714 new ordinary shares in the case of Mr Atherley and 71,428 new ordinary shares in the case of Mr Quinn, in each case at the Placing Price, with these subscriptions expected to take place at the earliest possible time permissible, which is envisaged to be in or around August 2023. At such time it is intended that the Company would apply for admission of the 307,142 new ordinary shares to listing on the Official List and to trading on the Main Market. This would not apply if and to the extent that (i) the issue of such shares would trigger a mandatory offer for the Company under the Takeover Code, (ii) the Company would not have sufficient shareholder authorities to issue such shares, or (iii) the application for admission of such new shares would require the Company to publish a prospectus.

In order to satisfy its obligations under the Placing through the issue of new ordinary shares, the Company would need to seek further shareholder authorities and publish a prospectus. Any prospectus published by the Company would need to be approved by the FCA in the United Kingdom. The Board believes that seeking further shareholder authorities and preparing a prospectus would be disproportionately costly and time-consuming.

The Placing Shares are therefore to be loaned to the Company by Mr Atherley, Chairman of the Company, in order that the Company is able to undertake the Placing in a timely manner. The Company and Paul Atherley have entered into a customary stock lending agreement dated 31 May 2023 (the “Stock Lending Agreement”) to document this arrangement. Under the Stock Lending Agreement, in repayment of the stock loan, the Company is required to deliver or procure the delivery of 657,711 ordinary shares to Paul Atherley by no later than 31 December 2023. Subject to the Company’s shareholders passing relevant resolutions to authorise the Board to allot new ordinary shares and disapply pre-emption rights at the Company’s next annual general meeting, which is expected to be held in or around July 2023, in repayment of the loan the Company intends to issue 657,711 new ordinary shares (the “Stock Loan Repayment Shares”) to Paul Atherley in or around August 2023.

The Company shall apply for admission of the Stock Loan Repayment Shares to listing on the Official List and to trading on the Main Market when they are issued, however at such point an approved prospectus is not expected to be required. As the Stock Loan Repayment Shares will be issued to Paul Atherley in accordance with the Stock Lending Agreement, this will not trigger a mandatory offer for the Company under Rule 9 of the Takeover Code.

For the avoidance of doubt, the loan of the Placing Shares to Alkemy Capital involves no cash consideration being paid to Paul Atherley in consideration for him entering into the Stock Lending Agreement and nor will any interest be payable under the Stock Lending Agreement.

Paul Atherley is a Director and is therefore is a related party of the Company. Owing to its size, the Stock Lending Agreement is considered to be a material related party transaction for the purposes of paragraph 7.3 of the FCA’s Disclosure Guidance and Transparency Rules. The Board of Directors (excluding Paul Atherley) has approved the entry by the Company into the Stock Lending Agreement and considers that the terms and conditions of the Stock Lending Agreement are fair and reasonable, insofar as the shareholders of the Company are concerned.