Pilgangoora Minerals has signed a farm‐in agreement to earn an interest in Venus Metals’ lithium tenements in Western Australia.
Under the terms of the agreement, Pilgangoora Minerals will explore for lithium-bearing pegmatites on exploration licences in return for an interest in these tenements and lithium and associated minerals.
The licences include E45/4630 and E45/4684, at the Pilgangoora East project; E45/4627 and P45/3004 at Wodgina South; and E20/885 and E20/896 in Poona.
Pilgangoora Minerals has paid $200,000 to Venus in cash to gain access to these tenements.
The earn-in programme is structured in three stages. The first stage requires an expenditure of $1m in the first year on exploration activities, followed by a further payment of $200,000 in exchange for a 25% interest in pegmatite minerals rights over the tenements.
During the second stage, Pilgangoora Minerals can increase its stake to 50% by spending another $1m towards exploration costs and paying $350,000.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
At this stage, a joint venture (JV) will be formed between the companies, with each firm owning a 50% interest in the entity.
Thereafter, Pilgangoora Minerals can choose to exercise an option to earn a further 25% interest. To achieve this, the company is required to complete a bankable feasibility study within five years of the date of formation of the JV.
Venus’s JV interest will be free carried until a decision to mine. Pilgangoora Minerals is responsible for arranging project finance and will also fund Venus’ share of costs as a development loan.
Venus will repay the loan from the proceeds of sale of production. The company will retain all rights over minerals other than pegmatite minerals.