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Pantoro and its Norseman Gold Project joint venture (JV) partner Tulla Resources have signed a binding term sheet with Mineral Resources to explore lithium potential at the project.

The JV will work to explore and develop lithium deposits across the Norseman Gold Project tenure in Western Australia.

Under the terms of the term sheet, Mineral Resources is to invest at least $356,582 (A$500,000) within six months and an additional $1.78m (A$2.5m) within 18 months.

Additionally, Mineral Resources will complete a feasibility study, including the definition of a Joint Ore Reserves Committee (JORC) compliant resource within 24 months. The completion of these tasks will provide the company with 25% of the lithium rights within the tenure.

It can earn an additional 40% of the lithium rights by funding the project to first production.

Mineral Resources is required to make a final investment decision within three months of earning its initial farm-in interest.

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On the other hand, the term sheet entitles Pantoro and Tulla to buy back and increase their ownership in the JV to a combined 49.9%.

Mineral Resources managing director Paul Cmrlec said: “This new partnership is an outstanding outcome for Pantoro to maximise the value of a key mineral asset at Norseman.

“The agreement allows us to progress without any distraction from our core business of gold development and mining while maximising value for our shareholders.”

In 2019, Pantoro acquired a 50% stake in the Norseman Gold Project, which is located in the Eastern Goldfields of Western Australia.

Tulla executive director Mark Maloney said that the deal will enable Norseman Project JV to focus on recommencing gold production at the site, scheduled for August next year.

Earlier this year, GR Engineering Services (GRES) received a letter of intent (LoI) from Pantoro for engineering, procurement and construction works for the processing facility at the project.