PERTH (miningweekly.com) – The share price of junior Southern Gold fell by nearly 9% on Monday as the company announced plans to branch out into battery materials.

Southern Gold has unveiled the proposed acquisition of battery materials company Iondrive Technologies (IDT) for A$1.2-million, payable in shares. The company would also undertake a A$2.5-million share placement, of which A$1.2-million would go towards IDT’s commercialisation and the remainder towards Southern Gold’s exploration activities in South Korea.

IDT has exclusive access to technologies developed through the University of Adelaide, and could play a significant role in the growing energy storage industry through the commercialisation of new battery-related technologies.

Southern Gold told shareholders that its exploration business would continue to be its core focus, with this acquisition providing an exciting strategic investment opportunity in the rapidly growing global energy storage market.

IDT holds the first right to acquire or enter exclusive world-wide licences across patent protected battery technologies being developed by the university. The technologies are grouped into three commercialisation-ready projects, namely enhanced performance non-flammable lithium-ion based batteries, a low-cost, environmentally sustainable method for recycling lithium batteries, and low-cost, safe, high cycle life aqueous-based batteries, with the potential to be the next generation of batteries, particularly suited to grid storage.

“This acquisition is an exciting strategic investment for Southern Gold, with the global push to net zero emissions by 2050 driving significant demand for both electric vehicles and grid energy storage,” said MD Robert Smillie.

“IDT is well positioned to participate in this growing industry with access to technologies across three key areas and a collaboration agreement that leverages the University of Adelaide’s considerable investment in the School of Chemical Engineering and Advanced Materials. While exploration in South Korea will continue to be our core business, we see this as an opportunity with the potential to add shareholder value and diversify Southern Gold’s business.”

He said that the acquisition would also diversify Southern Gold’s existing exploration business, and would build on the company’s recent move into lithium and rare earth element exploration in South Korea.

“It provides an opportunity to be involved in downstream processing and future applications for lithium. In particular, the lithium battery recycling project provides an alternate source for scarce resources that complements the potential sourcing of these critical minerals from exploration, whilst also solving a growing environmental issue. Further, it provides an opportunity to leverage recently established relationships in the government and private sector within the battery materials industry in South Korea,” the company said in a statement.

Both the acquisition and the proposed placement will be subject to shareholder approval.