Rare Earth Minerals (REM) has elected to exercise its option to move to a 10% interest in the San Gabriel, Buena Vista and the 94,814ha Megalit Concessions in northern Mexico.
The company has formally advised its joint venture partner Bacanora Minerals about its intention to exercise its option to go to a 10% interest in the sites, which surround the Sonora Lithium project.
As per the deal, Rare Earth has the option to acquire an initial 10% interest in the San Gabriel, Buenavista and Megalit concessions by paying Bacanora an upfront cash consideration of £250,000.
Rare Earth is also required to spend £500,000 on exploration and drilling on the concessions over a six month period.
The company said it has paid Bacanora a total of £500,000 and has elected to make an early payment of the remaining £250,000, updating the market as the process moves forward.
Rare Earth also has the option to increase its interest to 30% by paying an additional cash consideration of £500,000 and committing to a further £1m in expenditures, for exploration and drilling on the same concessions over one year.
Rare Earth Minerals chairman David Lenigas said the company finds it vitally important to cement its overall interest in the Sonora Lithium project prior to the expected publishing of the key metallurgical recovery studies and the potential upgrade to the previously public disclosed lithium resource of the project as a whole.
"REM is satisfied that an accelerated drilling programme on the extensions to the already delineated resource is justified, as the joint venture continues to test for the new limits of the lithium mineralisation. The early exercise of the option will assist with this," Lenigas said.