UK-based Alba Minerals has signed the letter of intent (LoI) to enter a definitive option agreement and acquire 100% of Cauchari South lithium project in Salta province, Argentina.
The agreement is subject to approval of the TSX Venture Exchange.
The project is located within Lithium Triangle, which is known to contain one of the world's largest lithium resources.
Salta province has infrastructure facilities and a mining-friendly jurisdiction with a main highway to Chile that passes through the Cauchari South concession.
Cauchari South site includes an area of around 1,300ha.
It is surrounded by Cauchari-Olaroz Salar on the south-west, lithium-producing Salar de Olaroz project and Lithium America's advanced stage Cauchari-Olaroz project.
The property also exhibits similar characteristics with the deeper, buried salar-type mineralisation that has been found in both of these projects.
Under the signed LoI, Alba Minerals has made a down payment of $20,000.
The definitive agreement is scheduled to be signed on 1 December.
Upon signing, Alba Minerals will have to pay the property vendors $175,000.
The company estimates the project's total cost will be approximately $2.15m over 18 months, in addition to issuing of one million Alba shares.
In expectation of signing the agreement, the company has decided to undertake a non-brokered private placement of up to $500,000 at a price of $0.10 per unit.
Each unit will consist of one share and single warrant that entitles the holder to buy one share for $0.15 valid for two years. This private placement is subject to exchange approval.