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HIPO Resources limited (ASX:HIP) made an announcement on 15 November 2018, stating that it has executed a Joint Venture Agreement with Crown Mining Sarl (Crown) to earn a 60 percent interest in Kamola Lithium Project in Democratic Republic of the Congo (DRC).
The Kamola Lithium Project is comprised of a mining and two exploration licenses which are positioned in the world-class Manono and Kitolo Lithium pegmatite belt. AVZ Minerals Limited (ASX:AVZ), Force Commodities Ltd. and Tantalex Resources Corp are also having their assets in the same belt.
During FY 2018, HIPO conducted due diligence which confirmed the presence of 5 structural pegmatites which means that Kamola Lithium Project has a potential to host a significant high-grade lithium resource. The company has confirmed that out of 5 pegmatites two are lithium bearing and the initial drilling program in the first quarter of FY 2019 will be focused on them.
As per the Joint Venture Agreement, HIPO will have to pay around US$5 million in exploration and project development expenditure within three years to maintain its Joint Venture interest. The company will pay $1 million for exploration activities (including drilling) within 12 months of commencement of the Joint Venture.
As part of the proposed drilling program for the first quarter of FY 2019, the technical consultants of the company will visit the site to complete the Evaluation of surface geology and map the known pegmatites. As per HIPOâs Executive Chairman Mr. Maurice Feilich, this transaction is a very significant development for the company, and it is very pleased to have agreed on terms with Crown which is a respected and established mining and development company in the DRC.
In the month of August, the Company also announced that it had entered into a strategic partnership and memorandum of understanding with St George Eco Mining Ltd where St George has agreed to provide exclusive research and development services, utilizing products, extraction methods and proprietary technology to develop HIPOâs Kamola lithium project in respect of the separation, recovery, and purification of lithium from its identified lithium bearing pegmatites.
The Company also entered into an earn-in agreement with Next-Battery Limited in which the Company will acquire an initial 25% interest in Next-Battery by funding US$500k towards an agreed budget for the development of the Next-Battery technology. In the month of August, the company also secured an exclusive option over an 80% interest in two highly prospective cobalt and copper licenses in the DRC.
As at 30 September 2018, the cash outflow from operating activities was $0.21 million, and the cash outflow from investing activities was $0.35 million. At the end of the September quarter the company, the company was having cash and cash equivalent of $1.16 million.
In the last six months, the share price of the company decreased by 40 percent as on 15 November 2018. HIPâs shares traded at $0.014 (- 6.667% intraday) with a market capitalization of circa $5.8 million as on 16 November 2018 (AEST 4:00 PM).
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