8-K: Stardust Power Secures Key Lithium Supply for Oklahoma Refinery

Stardust Power Inc. announced a non-binding Letter of Intent with Mandrake Resources Limited for a long-term supply of lithium chloride to its Muskogee, Oklahoma processing facility.

Summary

• Stardust Power Inc. has entered into a non-binding Letter of Intent (LOI) with Mandrake Resources Limited for the supply of 7,500 metric tons per annum (mtpa) of lithium carbonate equivalent (LCE) in the form of lithium chloride.
• The lithium chloride will be sourced from Mandrake's Utah Lithium Project and is intended to feed directly into Stardust Power's processing facility in Muskogee, Oklahoma.
• The agreement outlines a twelve-year term with an optional six-year extension at Stardust Power's discretion, potentially providing up to 18 years of dependable supply.
• The contemplated transaction remains subject to the negotiation and execution of a definitive purchase agreement by both parties.
• Stardust Power is developing a battery-grade lithium carbonate refinery in Muskogee, Oklahoma, with a planned capacity to produce up to 50,000 mtpa.
• Mandrake's Utah Lithium Project holds an Inferred Resource of 3.3 million tonnes of LCE and is located in the northern Paradox Basin, known for lithium-rich brines.

Sentiment

Score: 8

Explanation: The announcement of a significant, long-term, U.S.-sourced supply agreement for a key raw material is a strong positive for Stardust Power's development plans. Despite being non-binding, it de-risks the project, strengthens its strategic position in the domestic lithium supply chain, and validates its business model.

Positives

• Secures a reliable, U.S.-sourced supply of 7,500 mtpa LCE in the form of lithium chloride, a critical feedstock for Stardust Power's Muskogee facility.
• The long-term nature of the agreement (12 years with an optional 6-year extension) provides supply stability for up to 18 years.
• Enhances Stardust Power's financing options and reduces development risk for its Muskogee, Oklahoma project.
• Strengthens Stardust Power's position with customers and strategic partners by reinforcing its role as a critical hub for domestic lithium supply.
• Mandrake's Utah project benefits from proximity to key transport routes and established infrastructure, facilitating delivery to the Port of Muskogee.
• The agreement validates Stardust Power's centralized refinery model, designed for efficient processing of multiple chloride inputs and optimized production.
• Mandrake's Utah Lithium Project is described as a well-positioned U.S. brine asset with a clear path to development, offering scale and access to existing infrastructure.
• Utah's regulatory stability and federal support for domestic critical minerals development make it a compelling jurisdiction for lithium growth.

Negatives

• The agreement is currently non-binding and contingent upon the negotiation and execution of a definitive purchase agreement, introducing an element of uncertainty.

Risks

• The contemplated transaction is subject to the negotiation and execution of a definitive agreement, meaning it may not be finalized.
• Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties, including macroeconomic conditions, inflationary pressures, changes in interest rates, supply chain disruptions, evolving consumer demand, competitive and technological developments, regulatory or legal changes, litigation exposure, cybersecurity threats, and fluctuations in foreign exchange rates.
• Other unknown or currently immaterial risks could affect the accuracy of any forward-looking statements and actual results.

Future Outlook

Stardust Power continues to advance permitting and site preparation activities for its Muskogee, Oklahoma refinery, positioning the company to deliver battery-grade lithium carbonate efficiently and at scale. This supports the growing North American electric vehicle and energy storage markets. The company's centralized refinery model is designed to optimize production, maintain consistent output, and integrate additional lithium sources as they become available.

Management Comments

• "We see strong strategic alignment between Mandrake's Utah Lithium Project and our vision for a fully integrated American lithium supply chain. The project is a well-positioned U.S. brine asset with a clear path to development, offering scale, access to existing infrastructure, and a large brine resource that could be advanced efficiently with limited capital intensity. Utah's regulatory stability and federal support for domestic critical minerals development make it one of the most compelling jurisdictions for lithium growth." Pablo Cortegoso, Chief Technical Officer and Co-Founder of Stardust Power.
• "This agreement highlights the strategic fit of our location, leveraging established infrastructure and transport links, and strengthens the domestic lithium supply chain by ensuring a reliable, long-term partnership in producing battery-grade materials." James Allchurch, Managing Director, Mandrake Resources Limited.

Industry Context

This agreement significantly strengthens the domestic U.S. lithium supply chain, aligning with broader industry trends focused on securing local critical mineral resources. This is crucial for the rapidly expanding electric vehicle (EV) and energy storage markets. It supports the U.S. government's proactive efforts to promote domestic exploration and production of strategic materials, aiming to reduce reliance on foreign sources and enhance energy security.

Comparison to Industry Standards

• Mandrake's Utah Lithium Project, with an Inferred Resource of 3.3 million tonnes LCE, is positioned as a 'top tier US-domiciled lithium brine asset,' indicating its scale and potential competitiveness within the U.S. lithium sector.
• The project benefits from Utah's pro-mining jurisdiction and access to Tier 1 infrastructure, which is a common advantage for successful mineral operations in established mining regions.
• Stardust Power's centralized refinery model, designed to process multiple chloride inputs, offers operational flexibility similar to other advanced processing facilities that aim to diversify feedstock sources and optimize production efficiency.

Stakeholder Impact

• Shareholders: Potential positive impact due to reduced project risk, enhanced financing options, and tangible progress towards operational goals.
• Employees: Potential for future job creation at the Muskogee refinery as the project advances towards full-scale operations.
• Customers: Increased assurance of a future domestic supply of battery-grade lithium carbonate, supporting their supply chain needs.
• Suppliers: Mandrake Resources Limited stands to benefit significantly as a key, long-term supplier to Stardust Power.
• Creditors: Enhanced project viability and reduced risk could improve Stardust Power's creditworthiness and access to debt financing.

Next Steps

• Negotiation and execution of a definitive purchase agreement between Stardust Power and Mandrake Resources Limited.
• Stardust Power to continue advancing permitting and site preparation activities for its Muskogee, Oklahoma refinery.
• Stardust Power to advance toward its Final Investment Decision and the start of major construction at the Muskogee facility.

Key Dates

Recommendation

The non-binding Letter of Intent, while not a definitive agreement, represents a crucial de-risking step for Stardust Power's ambitious refinery project. Securing a long-term, U.S.-sourced feedstock from a significant resource like Mandrake's Utah project is a major positive catalyst. It validates the company's business model, enhances financing prospects, and positions Stardust Power as a key player in the domestic lithium supply chain. This tangible progress towards full-scale operations should be viewed favorably by investors, suggesting strong future growth potential if the definitive agreement is finalized.

Keywords

Lithium, Lithium Carbonate, Lithium Chloride, Battery-grade, Supply Chain, Mandrake Resources, Stardust Power, Muskogee, Oklahoma, Utah Lithium Project, Critical Minerals, EV, Energy Storage, Nasdaq, SDST