The Infinity Lithium Corp Ltd (ASX: INF) share price has had a disastrous start to the week.
In afternoon trade, the lithium explorer's shares are down a massive 67% to 6.2 cents.
Why is the Infinity Lithium share price crashing lower?
The Infinity Lithium share price has been sold off today following the release of an announcement relating to its San José Lithium Project in Spain. This project is the second largest hard rock lithium deposit in Europe.
According to the update, Infinity Lithium has received notification that the Investigation Permit Valdeflorez (PIV) application has been cancelled at the San José Lithium Project. This was due to the "urban unfeasibility of the research permit." Essentially, the project has been deemed to be too close to the local town.
The company advised that it strongly disputes the validity of the decision to cancel the application. Furthermore, following legal advice, the company has lodged an appeal of this decision.
Management explained that the company considers the Junta's resolution to cancel the PIV to be in direct breach of the law and in contradiction of previous rulings by the Junta on the environmental and urban legality and viability of the PIV.
Though, judging by the sizeable decline in the Infinity Lithium share price today, the market doesn't appear overly optimistic that the appeal will succeed.
Management commentary
Infinity Lithium's CEO, Ryan Parkin, commented "The joint venture partners strongly dispute the decision and are pursuing all options to reinstate the investigation permit. The Company, in unison with our joint venture partners, are reserving all rights relating to the cancellation of the PIV and those relating to the original call for tender and subsequent award resolution, in which the regional government process was predicated on the non-existence of insurmountable legal obstacles."
"Furthermore, the Junta's administrative fault in the original application process led to the 2019 decision to revert the PIV into application, facilitating the pathway to this most recent decision. The Company will work with all stakeholders and aims to seek a constructive and positive resolution whether through the PIV or successive rights held by the joint venture partners," he concluded.
