Shares in Australia’s Hawkstone Mining (ASX:HWK) dropped almost 23% on Friday after the company said it wouldn’t proceed with the acquisition of USA Lithium.
The botched deal would have added two lithium projects – the Big Sandy lithium clay project in Arizona and the Lordsburg lithium brine project in New Mexico – to Hawkstone’s portfolio.
The company had warned last month it t was in discussions with USA Lithium to amend an acquisition agreement signed in March. The intention was to de-risk the transaction, but Hawkstone said on Friday the parties were unable to reach an agreement, and the mutual decision was taken to terminate the acquisition agreements.
Thorn Mining (ASX: THR), which holds a “material” interest in USA Lithium after acquiring the stake from Pembridge Resources (LON:PERE) last year, said it was considering alternative options for its projects.
It also said the, effective June 14, Thor’s requirement to return 10% of disposal proceeds to Pembridge reduces to 5% for a further 12 months.
Thor is focused on its tungsten project in Nevada — Pilot Mountain — expected to have between five and ten years life as a low-cost open pit, and at least 15-year underground life after that.
The firm also has assets in Australia, where it owns the advanced Molyhil tungsten project in the Northern Territory, which Thor has said could be brought online within a year of financing being raised.
Tungsten, used to strengthen steel, last shot to prominence in 2012 when prices hit $54 a kilogram and is currently hovering around $32 a kg. It has lately kept an upward trend amid a production slowdown in China, the world’s top source of this rare element, accounting for 80% of total global output.
Prices also are benefiting from stronger Chinese demand for equipment made with super-hard materials such as tungsten alloys amid a wave of infrastructure construction. Demand remains brisk in Japan as well, where tungsten is used in cutting tools.