PMT and Albemarle (ALB US, Not Rated) have agreed not to extend the Memorandum of Understanding (MoU) between the two companies. The MoU was signed in August 2023, alongside ALB’s C$109m strategic investment in PMT. The MoU was exploring potential downstream integration with the Corvette project to construct a lithium hydroxide refinery in either Québec, other parts of Canada or the USA. The cancellation of the MoU will remove ALB’s exclusivity and standstill agreements on its strategic investment. We believe agreement will enable PMT to step up discussions with other potential development partners. Corvette is world class and, in our view, has the capacity to provide spodumene feed for up to three ~40ktpa lithium hydroxide refineries, and cancelling the MoU with ALB is a key enabler to facilitate this. We are reiterating our BUY rating on PMT/PMET and our A$1.80 and C$16.00 price targets.
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