Pinnacle Minerals, an ASX-listed mining company, has signed a formal agreement with E&D Fund to acquire a 75% stake in the Adina East lithium project in Quebec, Canada.

E&D Fund is an entity managed by Waratah Capital Advisors, with more than C$4bn ($2.9bn) in assets under management.

The Adina East project is located in the lithium region of James Bay, Quebec. It occupies 72.7km² (7,274.4 hectares) and has a total of 147 claims.

The project has several historically mapped pegmatites. The pegmatites are located around 24km along strike in the same stratigraphic sequence and location that hosts Winsome Resources’ Adina lithium project.

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By GlobalData

In October 2023, Pinnacle entered a conditional agreement to pick a 75% stake in the project.

As part of the transaction, the company agreed to issue more than 9.08 million of its shares and 7.6 million options to acquire fully paid shares in the company, each priced at A$0.15.

This share purchase will have to take place on or before three years from the date of the agreement.

The company also granted the seller offtake rights to 25% of all the minerals extracted from the project for $500,000.

In October, Pinnacle conducted a first pass, ground reconnaissance programme and sampled 14 pegmatite outcrops and boulders.

Several of the pegmatite outcrops and boulders are said to contain aluminous minerals. The assay results are expected next month.

Pinnacle managing director Nic Matich said: “Signing of the formal sale agreement for 75% of the Adina East lithium project is a milestone for the company and advances Pinnacle’s transition to a battery minerals explorer. Partnering with Waratah Capital at this stage of the company’s journey is a strategic move and is expected to bolster Pinnacle’s growth.

“The company will enter 2024 with a strong balance sheet and an exciting suite of prospective exploration projects, which together arguably provides shareholders, both current and future, with significant leverage to exploration success.”

Pinnacle stated that the offtake payment will significantly strengthen its balance sheet, bringing in enough capital for exploration throughout next year.