It was a difficult session for Patriot Battery Metals Inc. CDI (ASX: PMT) shares on Wednesday.
The lithium developer's shares sank as much as 9.5% to 76.5 cents before recovering in late trade.
The ASX lithium stock ended the day 5.5% lower at 80 cents.
Why did this ASX lithium stock crash into the red?
Investors were heading to the exits today after the company released an update on its agreement with lithium giant Albemarle Corp (NYSE: ALB).
According to the release, the two parties' memorandum of understanding's (MOU) nine-month term has concluded and will not be extended.
The MOU was assessing partnership opportunities to study the viability of a downstream lithium hydroxide plant integrated with the Corvette Lithium Project and located in Canada or the United States.
At the time, the ASX lithium stock cautioned that there was no assurance that the MOU will result in the completion of a study or the formation of a partnership or joint venture with Albemarle. Which is exactly what has happened, much to the dismay of shareholders.
What now?
Patriot advised that it now expects to fully engage with other downstream companies in the lithium supply chain. The good news is that management appears confident that it will be able to replace Albemarle.
It notes that as the scale and quality of the Corvette Project has become increasingly evident, it has received significant interest from participants in the lithium industry. Especially given the potential for Corvette to be a large and high-quality raw material supplier for the future of lithium-ion battery supply chains outside China. It believes that being able to fully engage with other downstream companies is in the best interests of shareholders.
The ASX lithium stock's President and CEO, Ken Brinsden, commented:
Our collaboration with Albemarle has been extremely valuable. We are proud of the progress we've made and are excited by the intense market interest in the Corvette project. As we move forward, Patriot is eager to expand its operations and explore new partnerships that support the growing demand for lithium raw materials and chemicals in North America and Europe. We also look forward to continuing our productive relationship with Albemarle in a flexible, non-exclusive format.
As things stand, Albemarle remains the company's largest shareholder, with a 6.4% stake.
Though, with the mining giant paying C$15.29 per share for its stake, it is down heavily on its investment. The company's shares are currently fetching C$8.03 on the Canadian stock exchange.
