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Lithium Australia grants an option to Charger over Australian exploration assets

Summary

  • Lithium Australia granted an option to Charger Metals for acquiring part of LIT's Australian exploration assets.
  • The deal's transaction is subject to due diligence and depends on ASX approval to Charger.
  • LIT and Okapi have amended and restated the Mount Day Farm-In Agreement to solely focus on tenement E63/1903 in the Lake Johnston area.

In a significant development, Lithium Australia NL (ASX: LIT) grants an option to Charger Metals NL to acquire part of LIT's Australian exploration assets.

A glance at LIT's Australian exploration assets

Coates Mafic Intrusive Complex: It is in the Western Yilgarn emerging Ni-Cu-PGE belt 28km south-east of Chalice Gold's Julimar discovery in WA. The project is prospective for copper, platinum, and nickel group elements. The project's geology is similar to Chalice Gold Mines' Julimar discovery. The Wundowie town is on the flanks of the Coates Mafic Intrusion that has a vanadium deposit that was mined briefly back in the 1980s. The geochemistry outcome from the nearby tenement makes it a promising region for exploration as it shows encouraging Ni, Cu, Au and PGE anomalies.

Lake Johnson Project: It is prospective for lithium, gold and nickel, located near Southern Cross, WA. Several lithium-caesium-tantalum pegmatites were noticed post geochemical sampling and reconnaissance geological mapping . A spodumene pegmatite cluster was discovered at Bontempelli Hill near Lake Medcalf, Western Australia. The soil sampling and geology show possible extensions to the south-east under nearby cover.

Bynoe Lithium and Gold Project: This project is near Darwin, Northern Territory. It is prospective for lithium and gold metals and is situated on Litchfield Pegmatite Belt extending 180km in a southerly direction from Darwin Harbour. The geological area hosts LCT pegmatites. The field has hosted several tin mining operations in the past and is prospective for tantalum and alkali metals. LIT's project is next to the advancing Finnis Lithium Project of Core Lithium Limited. A study done by early tenement holders produced nine areas with geochemical vectors for lithium mineralisation.

Agreement Details

LIT has granted Charger an option to acquire a 70% interest in tenements that are unencumbered, and 100% of one encumbered tenement.

Image source: LIT’s ASX announcement dated 09 December 2020

Charger is set to pay following consideration to Lithium Australia:

  • AUD 100,000 for payment of early exploration expenditure incurred on the Tenements
  • 8,800,000 fully paid ordinary shares of Charger
  • AUD 200,000 cash and 2,750,000 Shares upon the establishment of either a JORC 2012 of:

Data Source: Company Update, Date 09 December 2020

The transaction is subject to due diligence and ASX approval for Charger shares to be admitted to the official list of ASX.

Also read: Lithium Australia takes a major leap towards producing safe Li battery

The transaction puts Lithium Australia in a good position to enhance focus on its core business that being to ensure an ethical and sustainable supply of energy metals to the battery industry by creating a circular battery economy.

Lithium Australia, Okapi amend and restate Binding Farm-In Agreement

On 7 December 2020LIT announced about amending and restating the  Mount Day Farm-In Agreement with Okapi Resources Limited (ASX:OKRto focus undividedly on tenement E63/1903 in the Lake Johnston area, Western Australia. The revision will let Okapi concentrate on the top priority gold targets and lessen its expenditure responsibilities. In the Initial Agreement, Okapi had entered into a binding Farm-In Agreement with Lithium Australia on tenements E63/1903, E63/1805-1809, and E63/1866. 

Also read: Lithium Australia's collaborative exploration management strategy in Western Australia

The amended agreement terms for tenement E63/1903 include - 

  • Okapi will undertake a minimum expenditure of AUD 100,000 within two years from the execution date of the Amended Agreement and gets an exclusive right to earn a 75% interest in mineral rights other than lithium for tenement E63/1903 only.
  • To get the 75% interests in the tenement, Okapi needs to undertake exploration expenditure of at least AUD 800,000 including the AUD 100,000 Minimum Expenditure within 48 months from the date of execution of the Amended Agreement.
  • If OKR earns the Farm-in Interest, it must free carry LIT until the end of a mine plan which is approved by the Department of Mines, Industry Regulation and Safety as complying with the Mining Law. 

Kalkine Group Image, Data Source: Company Update, Date 07 December 2020

On 09 December 2020, at AEDT:1:46 PM, LIT was trading at AUD 0.065, up by 6.557% with a market capitalisation of AUD 48.32M.


 


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