Continued strong product pricing and operational update

BRISBANE, Australia, June 06, 2022 (GLOBE NEWSWIRE) — Allkem Limited (ASX|TSX: “AKE”, the “Company”) provides an update on product pricing and operations.

Lithium carbonate

Continued strong market conditions positively impacted the price received for lithium carbonate from the Olaroz Lithium Facility. The June quarter FY22 average price received for lithium carbonate is expected to be approximately 14% above prior guidance at US$40,000/t FOB¹ on sales of approximately 3,500 tonnes. Customers continue to value security of supply which is reflected in a fully committed order book for the remainder of the calendar year.

Spodumene

Similarly strong conditions continue in the spodumene market with realised spodumene concentrate pricing in the June quarter of approximately US$5,000/t SC6% CIF. Shipped spodumene concentrate for the quarter is anticipated to be approximately 38,000 dry metric tonnes (“dmt“) at an average grade in line with customer requirements of 5.3% with a further 15,000 dmt to be shipped in early July 2022.  

Current estimated annual spodumene production for FY22 is anticipated to fall marginally short of guidance by approximately 2-4%, at between 192,000 – 196,000 dmt, due to production delays resulting from the highly competitive Western Australian resources labour market and COVID-19 related requirements due to the delayed re-opening of the Western Australian border. Strategies have been implemented to mitigate these temporary impacts on production.

Argentine reference price

Argentina’s Customs Agency has recently set a reference price for lithium carbonate of US$53,000/t. This reference price is used by regulatory authorities when reviewing export sales of lithium chemicals to prevent under-invoicing and improve pricing transparency. This price is not used for calculation of taxes, royalties or duties and Allkem does not expect it will have any material impact on product exports, realised prices or profitability.  

This release was authorised by Mr Martin Perez de Solay, CEO and Managing Director of Allkem Limited.

IMPORTANT NOTICES

This investor ASX/TSX release (Release) contains general information about the Company as at the date of this Release. The information in this Release should not be considered to be comprehensive or to comprise all of the material which a shareholder or potential investor in the Company may require in order to determine whether to deal in Shares of Allkem. The information in this Release is of a general nature only and does not purport to be complete. It should be read in conjunction with the Company’s periodic and continuous disclosure announcements which are available at allkem.co and with the Australian Securities Exchange (ASX) announcements, which are available at www.asx.com.au.

Forward Looking Statements

Forward-looking statements are based on current expectations and beliefs and, by their nature, are subject to a number of known and unknown risks and uncertainties that could cause the actual results, performances and achievements to differ materially from any expected future results, performances or achievements expressed or implied by such forward-looking statements, including but not limited to, the risk of further changes in government regulations, policies or legislation; the risks associated with the continued implementation of the merger between the Company and Galaxy Resources Ltd, risks that further funding may be required, but unavailable, for the ongoing development of the Company’s projects; fluctuations or decreases in commodity prices; uncertainty in the estimation, economic viability, recoverability and processing of mineral resources; risks associated with development of the Company Projects; unexpected capital or operating cost increases; uncertainty of meeting anticipated program milestones at the Company’s Projects; risks associated with investment in publicly listed companies, such as the Company; and risks associated with general economic conditions.

Subject to any continuing obligation under applicable law or relevant listing rules of the ASX, the Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements in this Release to reflect any change in expectations in relation to any forward-looking statements or any change in events, conditions or circumstances on which any such statements are based. Nothing in this Release shall under any circumstances (including by reason of this Release remaining available and not being superseded or replaced by any other Release or publication with respect to the subject matter of this Release), create an implication that there has been no change in the affairs of the Company since the date of this Release.

Not for release or distribution in the United States

This announcement has been prepared for publication in Australia and may not be released to U.S. wire services or distributed in the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction, and neither this announcement or anything attached to this announcement shall form the basis of any contract or commitment.

¹ “FOB” (Free On Board) excludes insurance and freight charges included in “CIF” (Cost, Insurance, Freight) pricing. Therefore, the Company’s reported prices are net of freight (shipping), insurance and sales commission. FOB prices are reported by the Company to provide clarity on the sales revenue that is recognised by SDJ, the joint venture company in Argentina