Most observers believe MinRes’ stake was designed to give it leverage in talks over offtake from Essential’s Pioneer Dome lithium project, or for MinRes to provide mining services at Pioneer Dome.
Asked whether Essential’s revived offtake talks had included MinRes last week, Mr Spencer said: “That conversation hasn’t been had yet.
“It is a conversation that needs to be had, so it will happen soon.”
Mr Spencer said talks over the past week had focused on big Chinese, Korean and Japanese lithium buyers, who had been mobilised into action by the wave of mergers and acquisitions sweeping the Australian lithium sector.
Mr Spencer hinted MinRes’ shareholding also created some complications when considering offtake arrangements.
“If MinRes or another Australian company puts up a competitive offer then of course we would have to look at it,” he said.
“The difference would probably be, with MinRes being a shareholder, I think if we did a deal with them it would require shareholder approval, whereas if we do a deal with a China Inc or a Korea Inc that doesn’t necessarily require shareholder approval.”
Scoping studies published in February suggest it would cost Essential about $293 million to build a mine with a 7.3 year lifespan at Pioneer Dome and export lithium rich spodumene concentrate through the Western Australian port of Esperance.
The mine would pay for itself in less than two years if lithium prices average $US1500 a tonne; the commodity was fetching closer to $US4000 a tonne last week.
“If a counter-party puts forward a proposal that is in the interests of all Essential shareholders, and it results in us getting into production, then we will include it as part of our expressions of interest process,” said Mr Spencer.
“The expressions of interest process is all about ‘we can give you offtake and you can help us with funding to get it into production’.”