Lithium developer Arizona Lithium has formed a strategic alliance with Navajo Transitional Energy Company (NTEC), a wholly owned company by The Navajo Nation, to develop the Big Sandy lithium project in the US.

According to the non-binding strategic alliance terms sheet, NTEC will manage all permitting and contract mining services for the Big Sandy project.

The terms sheet allows the two firms to start the initial work on the development of the Big Sandy project. It also provides time for the parties to advance mutual due diligence and the development of a final definitive agreement.

Arizona Lithium managing director Paul Lloyd said: “Through our initial agreement, and subject to agreeing on definitive agreements, NTEC will take over the operational development of Big Sandy and will manage all aspects from the permitting requirements for additional exploratory drilling process through to mine design, environmental assessments, construction, and contract mining operations for the project.”

A definitive agreement between the firms would allow NTEC to receive a cash remuneration or Arizona Lithium shares and options to purchase additional ordinary shares by meeting certain milestones in the project development.

If a definitive agreement is signed, NTEC managing director Vern Lund would join Arizona Lithium’s board and NTEC will serve as the mine operator.

Located on interstate I93 between Phoenix and Las Vegas, the Big Sandy Project is a shallow, flat-lying mineralised sedimentary lithium resource.

According to the estimates, the project holds a total indicated and inferred JORC resource of 32.5 million tonnes grading 1,850 ppm Li for 320,800t of Li₂CO₃.