One World Minerals (OWM) has entered a binding letter agreement to acquire all shares of Lithium Investments (LIL).
The principal assets of LIL includes the rights and interests under an option and joint venture agreement (option agreement) with third-parties to acquire up to a 90% interest in the Rico Litio Property in Mexico.
The Rico Litio Property includes an area of 75,410ha over a closed basin.
LIL conducted a sampling work programme that returned results between 53 and 188 parts per million lithium in the northern part of the property.
The southern part of the property returned samples ranging from 15 to 82 parts per million lithium. Samples also assayed between 1% and 1.9% potassium at both ends of the property.
Samples were collected by Jehcorp and analysed at Chemex Labs in Vancouver.
In addition, the basin exhibits favourable geological attributes to develop lithium brines following recent tectonic and volcanic activity.
Rico Litio Property is in the state of Baja California Norte, 35km from San Felipe. It is accessible through roads within the basin.
Under the agreement, OWM will issue 22.5 million common shares to LIL with ten million common shares issuable upon closing of the transaction, and an additional 12.5 million common shares available on the first anniversary of the deal closure date.
Furthermore, OWM will pay C$100,000 ($74,368) after 30 days from the closing date.
The agreement also requires OWM to pay C$200,000 ($148,737) on the first anniversary date, C$300,000 ($223,106) on the second anniversary date and C$400,000 ($297,475) on the third anniversary from the deal closing date.
Under option agreement, LIL has the option to secure an 80% interest in the property by issuing 1.6 million shares, making a payment of $250,000 along with taking up property expenditures of $900,000 within this year.
LIL can acquire additional 10% interest in the Rico Litio Property by paying further $5m after completing the feasibility report on the property.
An exploration programme will be conducted at the property, which will include resistivity geophysical surveys, geologic mapping and detailed geochemical sampling throughout the basin.
Drill testing for anomalous brines with drilling of several targets is expected to start in May and be completed by the end of June.