On 10 December 2018, Kidman Resources Limited (ASX: KDR) announced regarding the settlement of Mt Holland Tenement exemption and forfeiture matter. Lithium developer, Kidman Resources has executed a deed of settlement with the objectors to exempt the minimum expenditure obligations on Mt Holland tenements. Following the release of this announcement, the share price of the company increased by 7.8 percent as on 10 November 2018 (2:20 PM AEST).
As per the announcement, all objections to the applications for exemption have been withdrawn which is a very positive news for the company. Further, the company also reported that the forfeiture applications at Mt Holland will be dismissed.
Earlier Kidman had requested Minister for Mines and Petroleum to grant exemption certificates for all tenements that were subject to exemption objections and will lodge dismissal orders with the Perth Mining Warden on all other tenements.
This settlement will provide certainty for the company and its joint venture partner Sociedad Quimica y Minera de Chile S.A. (SQM). And this settlement will enable Covalent Lithium to progress the integrated project development unimpeded. The conclusion of the settlement will trigger payment of SQM’s outstanding milestone payments, being US$25mn directly to Kidman and US$60mn directly to the Covalent Lithium joint venture.
Kidman and SQM are in discussions regarding the legally binding agreements in relation to the US$100mn capital expenditure facility. This facility, together with the further outstanding milestone payments by SQM will provide sufficient funding to the company for joint venture cash calls.
As per Kidman Managing Director and CEO, Mr. Martin Donohoe, this settlement resolves the matter completely and now the company will be able to fully focus on progressing the development of the Mt Holland Lithium Project. Mr. Martin further added that the company will also secure further strategic offtake agreements with key global partners and continue its discussions in relation to the provision of debt facilities with prospective lenders.
During FY 2018, the company achieved various milestones which include the finalization of the formation of its strategic joint venture named Covalent Lithium Pty Ltd with one of the world’s largest lithium producers, Sociedad Quimica y Minera de Chile S.A. (SQM). And through this joint venture, the company was able to secure an exclusive option to lease a premier site for its Refinery and that premier site was comprised of critical infrastructure including logistics, energy and it was having access to chemical reagents and supplies as well as proximity to a pool of highly skilled labor. During the year, the company also witnessed a 54 percent increase in the Earl Grey combined Mineral Resource after a 12-month Resource definition and exploration drill program.
Meanwhile, in the last six months, the share price, of the company has fallen by 40.97 percent as of 7 December 2018. KDR’s shares traded at $1.445 with a market capitalization of circa $535.41 million as on 10 December 2018 (AEST 2:20 PM).