Patriot Battery Metals Inc. (PMET: CSE, PMETF: OTCQB, R9GA: FSE) has successfully closed a significant private placement, securing C$69 million (approximately US$48 million) from Volkswagen Group. This strategic investment marks a pivotal moment for Patriot, as Volkswagen now holds a 9.9% stake in the company, enhancing its position within the lithium supply chain.
The capital raised will primarily fund the exploration and development of Patriot’s Shaakichiuwaanaan Lithium Project located in Quebec, Canada. This project is notable for its high-grade lithium resources and is positioned to play a crucial role in meeting the increasing demand for lithium, especially as the electric vehicle (EV) market expands. Ken Brinsden, CEO of Patriot, expressed pride in welcoming Volkswagen as a strategic shareholder, emphasizing that this partnership is a significant step forward in delivering essential lithium raw materials globally.
In conjunction with the investment, Patriot has entered into a binding offtake agreement with Volkswagen’s battery subsidiary, PowerCo SE. Under this agreement, Patriot will supply 100,000 tonnes of spodumene (a lithium aluminum silicate mineral) concentrate annually over a decade. This arrangement not only secures a stable revenue stream for Patriot but also aligns with Volkswagen’s strategy to establish a robust battery supply chain in North America.
The spodumene concentrate sourced from the Shaakichiuwaan Project will support PowerCo’s battery production facilities across Europe and North America. This includes the gigafactory in St. Thomas, Canada, which is expected to have a capacity of up to 90 GWh. The partnership reflects Volkswagen’s commitment to vertical integration in its battery supply chain, from sourcing raw materials to producing batteries.
The collaboration extends beyond mere investment and supply agreements. The parties have also established an investor rights agreement that grants Volkswagen certain rights regarding future equity raises by Patriot. Additionally, a non-binding Memorandum of Understanding (MoU) has been signed to foster ongoing strategic collaboration between PowerCo and Patriot. This MoU aims to explore shared objectives, including the potential development of a chemical conversion facility that would enhance the sustainability of the battery supply chain.
Brinsden highlighted that the Shaakichiuwaan Project is not only significant due to its size but also because it contributes to developing key western supply chains necessary for meeting future lithium demands. As automakers like Volkswagen accelerate their transition to electric mobility, securing reliable sources of lithium becomes increasingly critical.
Patriot Battery Metals’ partnership with Volkswagen represents a major milestone in its journey toward becoming a leading supplier of lithium raw materials for the North American and European markets. With this strategic investment and the accompanying agreements, Patriot is positioned to capitalize on the growing demand for lithium as part of the global shift towards electrification. This partnership validates the potential world-class nature of the Shaakichiuwaan Project as well as underscores the importance of collaboration in building sustainable supply chains for future energy solutions.
