ASX lithium stock Delta Lithium Ltd (ASX: DLI) has attracted a major new investor in ASX 200 mining behemoth Mineral Resources Ltd (ASX: MIN) led by billionaire Chris Ellison.
Known as Red Dirt Metals until its name change in May 2023, Delta Lithium is still at the explorer stage of development but is nearing production readiness now.
The ASX lithium stock has done very well in 2023. It is currently up 86% to 84 cents in the year to date.
Let's look into the details of Mineral Resources' purchase.
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Mineral Resources takes major stake in ASX lithium stock
According to ASX lodgements from Delta Lithium, Mineral Resources bought a 14.24% stake on 14 August, taking it well beyond the status of 'substantial holder' (5%).
The stake, involving 74.4 million shares, was purchased through Mineral Resources subsidiary Lithium Resources Operations Pty Ltd.
Delta Lithium investors were excited with the ASX lithium stock lifting 11% on the day the new substantial holding notice was published.
Delta Lithium welcomed the ASX 200 mining company's investment.
In a statement, Delta Lithium executive chair David Flanagan said:
Mineral Resources runs a very successful Lithium business. The recent acquisition of shares provides
additional verification of Delta Lithium's projects, their strong exploration potential and near-term ability to enter production.
Then it buys more…
On Tuesday this week, Mineral Resources purchased another 18.4 million shares, upping its stake in the ASX lithium stock to 17.44%.
This took its holding beyond Delta Lithium's previous key backer, Idemitsu Australia, which is a subsidiary of the Japanese conglomerate Idemitsu Kosan Co., Ltd.
In June, Delta Lithium announced an additional $46.4 million investment from Idemitsu Australia, which took its ownership to 15% of the company.
On Tuesday, Delta Lithium flagged a potential change to its board, given the expectation that Mineral Resources would be requesting a seat at the table, as is customary for such a large shareholder.
Mineral Resources has bought other ASX lithium stocks before
As my Fool colleague Mitch points out, this isn't the first time Mineral Resources has taken stakes in other lithium mining companies.
Mineral Resources holds a parcel of Global Lithium Resources Ltd (ASX: GL1) shares and has previously held Pilbara Minerals Ltd (ASX: PLS) shares, before selling them in 2021.
What's the latest news from Delta Lithium?
Delta Lithium owns four Western Australian projects.
They are the Yinnetharra and Mt Ida lithium projects, the Eureka gold project, and the Earaheedy Basin PB-ZN project.
The company is awaiting formal approval to commence mining at Mt Ida. In recent months, it has also reported "stunning" drilling results at Yinnetharra.
In an update on 8 August, the company said Mt Ida was on track for mining approval later in 2023.
Flanagan said:
Mt Ida is the only lithium project in the current Western Australian mines department currently under consideration. It is going to be the next lithium mine in WA.
Delta Lithium's latest update came on 21 August in relation to its large early-stage Yinnetharra project.
Yinnetharra encompasses the recent substantial lithium discovery at the Malinda Prospect and many other untested prospects.
Drilling results have already revealed lithium mineralisation stretching 350 metres below the surface.
New drill results revealed the following:
- 33 metres at 1.9% Li2O from 218m in YRRD118
- 19 metres at 1.6% Li2O from 190m in YRRD114
The news sent the ASX lithium stock 1.2% higher on the day.
Flanagan said:
Everything we are learning about Malinda is reinforcing our plans to push forward as fast as we can.
Geometry, grade and metallurgy are all looking terrific.We believe that Yinnetharra clearly has the potential to develop into a world class project and the Delta
team is rapidly proving our theory correct.
Delta Lithium was one of the best-performing All Ords mining shares of FY23.
The ASX lithium stock has a market cap of $470 million.
