Dakota Minerals is in a strong position as it progresses its strategy to be a major supplier of lithium carbonate and lithium hydroxide into the European battery market.

It has early mover advantage in Portugal, Europe’s leading lithium producer, where it is building up a large tenement package covering three key lithium pegmatite fields in the north of the country.

And it also holds what managing director and CEO David Frances describes as the “Holy Grail” of potential starter pits at its lithium project in Western Australia.

Frances said there were several factors that set Dakota apart from other lithium hopefuls.

“We have an absolutely clear strategy, we’re focused, well-funded and I think we have extremely good management, who have an exceptional track record of taking projects from inception right through to production,” he said.

The company also intends to go a step further than other miners and produce lithium carbonate and lithium hydroxide, rather than ship bulk concentrate, given the lower and clean hydropower costs in Portugal.

Thanks to a recent $A12.3 million capital raising, Dakota is well funded to start drilling in Portugal this month, finalise a maiden resource for its Lynas Find lithium project in northern WA and continue due diligence on other potential lithium acquisitions.

“The company is in a very strong position and we have early mover advantage in Europe,” Frances said.

He said countries in Europe were leading the world in the uptake of electric vehicles, and production of lithium-ion batteries was growing to keep up with demand.

“The shift to electric vehicles there is being driven by the people, everybody wants to go clean and green - they’ve already made that paradigm shift,” he said.

“We viewed that as where the first early onset penetration of electric vehicles is going to be so that was our strategy right from day one.” 

The other critical factor is the recent emergence of affordable home energy storage solutions based on lithium-ion battery technology with the way being led by Daimler-Mercedes and their modular system. (see pic attached)

Frances said Portugal was a first world country without the high prices, had excellent infrastructure and ranked in the global top 10 of all countries in the Fraser Institute’s survey of mining companies for policy perception index, an assessment of the attractiveness of mining policies.

Through its June deal with Lusorecursos LDA, Dakota has acquired 100% of the rights to the Lusidakota project in Portugal.

Frances said lithium miners in Portugal tended to be small operations or family businesses, mainly supplying the ceramics market, but Dakota intended to grow a significant business and had applied for large areas that covered pegmatite swarms.

The company was also negotiating with smaller landholders to incorporate their tenements into the project.

The Lusidakota project currently comprises seven exploration licences under application and the granted Sepeda tenement in the Barroso-Alvão area in central northern Portugal.

Sepeda contains historic mine workings and initial rock chip samples have brought promising results up to 2.8% lithium oxide.

Frances said drilling at Sepeda would start this month and in addition the company would pursue the successful granting of the tenement applications.

Back in Australia, Dakota is weighing up the best way to realise value from Lynas Find with Frances believing it’s “the Holy Grail of starter pits: it’s right from surface, it’s thick, high-grade and shallow dipping, which means lower opex and faster payback of capital.”

The 268sqkm project is in the Pilgangoora region, abutting Pilbara Minerals and along strike from Altura Mining whose projects have combined resources of about 163 million tonnes at more than 1% lithium oxide.

Drilling highlights at Lynas Find include 35m at 2.1% and 35m at 1.75% lithium oxide, with a weighted average of 1.6% and very low impurities.

Frances said the company would establish the maiden resource within months to determine the future of the project, which Dakota viewed as “a stepping stone” to Europe.

Regarding the pending Resource Statement, Frances is relatively relaxed as he knows the company has options. Given the recent activity in the region and the proximity to a (currently) under-capacity plant, there will be keen interest in a high-grade starter pit with a near-term production profile. 

After a busy first half getting the company’s first foothold in Europe, generating high-grade drilling results at Lynas Find and raising more than $12 million, Frances said the pace would be maintained as the year progressed.

“It will be another busy quarter,” he said.

“We’ll establish a maiden resource at Lynas Find, continue metallurgical studies, continue negotiations in Europe and due diligence on other lithium projects and start drilling in one of the best areas in Portugal.

“We know there’s lithium there, our rock chip results look pretty good.”

He did not rule out looking at a dual listing as the European assets start to take shape.

While many juniors have jumped on the lithium bandwagon, Frances said the Dakota team was capable of growing the company into a high quality diversified lithium play.

“We’re guys who get in there, negotiate deals, explore, add value, get resources defined and develop them with the ultimate goal of mining them,” he said.

“It’s a one stop shop company that’s absolutely focused on one sector.”

Dakota chairman John Fitzgerald is a highly experienced mining executive who is also on the board of ASX 100 listed company Northern Star Resources, Danakali Resources and Carbine Resources.

Technical director Dr Francis Wedin has mining experience spanning three continents and multiple commodities and is passionate about driving the transition to a global renewable energy grid.

Frances also brings vast international mining and funding experience, including the transformation of previously ASX-listed Mawson West into a Toronto-listed African miner by way of the largest base-metals capital raise and IPO in the world for 2010.

Frances said the company would continue to evaluate and build its project pipeline and tenement portfolio through strategic acquisitions in prospective jurisdictions.

“We want to be the main supplier of lithium carbonate and lithium hydroxide into the ever-growing European market for battery production,” he said.

“We’ve got a very clear strategy, we’re extremely focused, we’re well funded and we believe we’ve got a good management team.

“We’re going to be very busy in the coming quarter getting a lot achieved.”