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Highlights
- Marquee has entered a legally binding term sheet with Mineral Resources in regards with lithium rights at Marquee’s West Spargoville Project (WSP).
- MinRes has the right to acquire an initial 25% interest in the lithium rights at WSP.
- Both Marquee and MinRes shares closed in red today.
Australian mineral explorer, Marquee Resources Limited (ASX:MQR) shared via an ASX-announcement that it has signed a binding term sheet with Mineral Resources Limited (ASX:MIN), Western Australian headquartered mining company.
While MQR ended today’s trade at AU$0.100 apiece, down 6.976%, MinRes shares shed off 1.908% to end at AU$57.580 per share today. Noteworthy here is that the benchmark index, ASX200 materials (XMJ) closed 0.363% lower on Thursday.
The S&P/ASX200 closed lower Thursday, dropping 58.10 points or 0.80% to 7,175.90. Sectors ended mixed. 9 of 11 sectors were lower along with the S&P/ASX 200 Index.
Details of the binding term agreement
Marquee and Mineral Resources entered into a legally binding term sheet for a joint venture and farm-in agreement concerning the lithium rights at the West Spargoville Project (WSP) of MQR, located in Western Australia.
The agreement allows Mineral Resources to obtain an initial 25% interest in the lithium rights at the project. To gain the initial 25% interest, MinRes must fund all development and exploration activities and complete a feasibility study within four weeks. The feasibility study includes a JORC compliant resource in 24 months.
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To perform the initial farm-in obligation, MinRes needs to fund a minimum AU$1,000,000 for development and exploration activities on the Tenement by the end of 2022. In addition to this, MinRes will fund the AU$500,000 cost to exercise the Fyfehill Option at the project.
MQR will take care of implementation and development activities during the initial farm-in period.
Image source: © Buranatrakul | Megapixl.com
The announcement highlighted that MinRes could choose from Processing farm-in and mining farm-in.
Image source: © 2022 Kalkine Media®
In Processing farm-in, MinRes can get an additional 45% interest in the lithium rights, taking the total interest to 70% if the company funds WSP until the 'final investment decision on a mine development for the project. Also, the company will offer complete mine to port services to the join-venture.
In Mining farm-in, MinRes can get an additional 26% interest in the lithium rights by providing funds till the point of construction, development and commissioning of a mine and associated facilities required to conduct mining operations at WSP. As a part of the mining farm-in, a mine gate sale agreement would be inked between the parties under which MinRes will construct, operate and own all infrastructure, plant and equipment for mining operations at the project. Also, it will buy Lithium bearing ore from the joint venture for a mine gate sale price.
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