Atlas Iron has announced plans to partner with Pilbara Minerals for two lithium projects in the Pilbara region of Western Australia.
Pilbara Minerals has agreed to purchase and farm into Atlas’ Cisco lithium prospect where sampling has exhibited similar lithium enrichment as found in Pilbara’s flagship Pilgangoora lithium project.
Both companies also entered a memorandum of understanding, involving Atlas providing logistical services to a direct shipping ore phase for Pilbara’s Pilgangoora project. Atlas will continue to retain the ownership of other lithium prospects.
Atlas managing director Cliff Lawrenson said: “This agreement gives Atlas the opportunity to realise the value of Cisco using Pilbara’s lithium expertise and investment, and a farm-in model which frees Atlas of any expense until a decision to mine.
“At the same time, we can generate additional revenue by providing a logistics service to Pilbara, which leverages our existing operations and skills, developed over a decade of work in the Pilbara region.”
Under the Cisco farm-in and joint venture agreement, Pilbara will acquire 51% interest in E45/4270 exploration licence for $2.3m.
Pilbara can increase its ownership to 70% by investing additional $1m on exploration in the first year.
Pilbara will free-carry Atlas to completion of a definitive feasibility study and progress the project to a decision to mine to increase its interest to 80%.
At this juncture, Atlas will either have to fund its share of expenses or dilute. It may also elect to exchange its participating interest in the joint venture for a 2% gross sales royalty.
Pilbara has completed a definitive feasibility study for a long-life lithium project at the Pilgangoora site, 30km east of Atlas’ Wodgina mine. Pilbara has informed the market that it aims to commission Pilgangoora by the end of this year, with production scheduled to ramp up during 2018.
Pilbara has planned to commission Pilgangoora by the end of this year.
Image: Lithium metal pieces. Photo: courtesy of Dnn87.
