Essential Metals and its joint venture (JV) partner International Lithium (ILC) have agreed to sell 100% of the Mavis Lake Lithium Project in Ontario, Canada, to Critical Resources, through the granting of an option.

Under the option agreement, Critical Resources has made a non-refundable exclusivity fee payment of $149,297 (A$200,000).

This provides Critical Resources with exclusivity until 4 January 2022, allowing it to carry out due diligence on the lithium project.

If the option is exercised, Critical Resources will make a A$1.5m cash payment to the sellers and issue 68,000,000 shares in Critical Resources at an issue price of A$0.022 each.

Moreover, Critical Resources will issue the deal facilitator with eight million fully paid ordinary shares.

The sale is part of Essential Metals’ efforts to capitalise on the current strong sentiment in the lithium sector and focus on its lithium and gold projects in Western Australia.

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By GlobalData

Critical Resources expects the project to expand its portfolio while providing further exposure to critical minerals.

Essential Metals managing director Tim Spencer said: “The strong interest in lithium has allowed Essential and ILC to monetise an early-stage, non-core asset on favourable terms. Retaining upside exposure via a shareholding in Critical Resources means we will benefit from any success the Critical Resources team has in advancing Mavis Lake.”

At the same time, International Lithium has further expanded its Raleigh Lake lithium and rubidium project in Ontario, bringing its total claims in the region to 27,000ha.

International Lithium chairman and CEO John Wisbey said: “Many new pegmatites have recently been revealed at these claims and we will be doing a lot of further exploration and drilling to validate the scale of our discovery there over the next few months.

“Focus is important, and we decided that it was better for ILC to concentrate its efforts in Ontario on our key and wholly owned project there Raleigh Lake rather than also paying to regain 100% of Mavis Lake.”