- Wealth Minerals (TSXV: WML) has hit a number of roadblocks in developing its Atacama Lithium Project in Chile
- Two years ago, the company signed a joint venture agreement with state-owned National Mining Company of Chile, regarding the project, but this has yet to materialise
- Furthermore, an ongoing partnership with mining company Uranium One has been stalled due to the COVID-19 pandemic
- Due to a turndown in the lithium market, Wealth Minerals has been struggling to finance its operations over the past two years
- Wealth Minerals Ltd. (WML) is down 11.11 per cent, with shares trading at C$0.12 and a market cap of $17.8 million
Wealth Minerals (TSXV:WML) is struggling to develop its South American lithium project, after a difficult two years for the company.
The company had hoped that by early 2020 its Atacama Lithium Project in Chile would have progressed further. However, a planned strategic alliance with the state-owned National Mining Company of Chile has not yet materialised.
Wealth signed an agreement with the state-owned company over two years ago. Despite this, The National Mining Company of Chile has not yet formed a joint venture with Wealth, which was outlined in the agreement.
Wealth still believes the joint venture will happen eventually but has also said that progressing the Atacama Lithium Project without one is still possible.
Furthermore, the company has previously signed a memorandum of understanding with mining company Uranium One. However, a key presentation with both companies is currently stalled, due to concerns surrounding the COVID-19 outbreak.
In a shareholder address released today, CEO of Wealth Minerals, Henk van Alphen, was candid but optimistic about the coming months.
“I write this message in order to reach out to all of our stakeholders during this difficult time.
“The team and management at Wealth continues to work tirelessly, although remotely, and remains optimistic that the company will exit this current situation strong and with great promise,” he said.
The company has recently been chiefly focussed on developing the Atacama Lithium Project.
Before 2018, a strong lithium market had provided adequate financing for the company.
However, a recent market downturn in the last two years has forced the company to take on more debt. By the middle of last year, the company had only $130,917 in available cash and a number of executive staff were deferring salaries to save expenses.
Since that time, the company has only managed to drum up moderate financing, which suggests Wealth’s situation has not improved.
The company did not announce further financing plans alongside this release.
Wealth Minerals Ltd. (WML) is down 11.11 per cent, with shares trading for C$0.12 at 11:28am EST.