As part of the agreement, MinRes will solely fund up to A$4.5m ($2.95m) for the development and operation of a proposed pilot plant and an engineering study for a demonstration plant.
The company will also be responsible for the supply of raw materials needed to support the extraction process at no cost.
For its part, Lithium Australia will contribute its patented disruptive lithium extraction technology, LieNA, and manage the pilot plant’s production process.
The technology has the potential to enhance lithium extraction yields by up to 50% compared with current market performance.
In a press statement, Lithium Australia said: “On successful completion of the pilot plant operations and engineering study, MinRes’ convertible note will convert into equity in a new joint venture (JV), which will be equally owned by MinRes and Lithium Australia.
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The JV will own and commercialise the LieNA technology through a licensing model. The technology will be licensed to third parties at a target headline gross product royalty rate of 8%.
Lithium Australia said in a statement: “The royalty model materially expands Lithium Australia’s addressable market as it has the potential to capture a fee on all tonnage processed via any mine utilising the LieNA technology.”
The LieNA technology is initially to be licensed to a larger demonstration plant, which MinRes can choose to independently fund, develop and operate.
Lithium Australia CEO Simon Linge said: “MinRes is the perfect partner to complement our leading lithium extraction technology, given its extensive owned operations and strategic movement downstream into the battery materials sector.”