Australian exploration company Si6 Metals has signed a term sheet agreement with Foxfire Metals, a company focused on Brazilian operations, to acquire a 50% stake in its portfolio of ten licences and tenements in Brazil.

As part of the agreement, Si6 also plans to enter a joint venture agreement with respect to the tenements.

The ten tenements are spread across more than 17,000 hectares in three different states in the country.

They are claimed to hold lithium, rare earth elements (REE), gold, base metals and platinum group elements.

Seven of them are located in Minas Gerais, including five in the Lithium Valley, two in Ceará, and one in Caldera.

Another tenement is in the underexplored state of Amazon, where Foxfire Metals claims to have found REEs.

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Si6 Metals executive director Jim Malone said: “This is an excellent opportunity for Si6 to participate in one of the most prospective exploration areas in the world. The Lithium Valley in Brazil offers significant opportunities in lithium and in REEs and is home to some very successful companies listed both on the ASX and the TSX that have been exciting the markets with their discoveries.

“Additionally, there are opportunities for Au and base metals projects amongst the Brazilian portfolio. By partnering up with Foxfire Metals, Si6 will also inherit an experienced and skilled team with significant on-ground experience and expertise in Brazil.

“I believe this portfolio has the potential to significantly enhance the value of Si6 and complement our Cu-Ni projects in Botswana, as well as our prospective Au project in Western Australia.”

Si6 secured exclusive rights from Foxfire to conduct due diligence and evaluate the acquisition, within 30 days from the date of timesheet agreement.

If Si6 agrees to proceed further, it will negotiate a formal agreement and plans to issue 209 million of its shares and a 1.5% gross sales royalty to Foxfire.

Once completed, the two companies will form a new company in the country to hold the tenements. They will transfer the tenements to the new joint venture company.

Si6 further stated that it will free carry Foxfire by funding 100% of its exploration expenses and annual fees until a feasibility study is completed or a decision to mine is received.