Lithium Ionic, through its subsidiaries Salit Mineração and Neolit Minerals Participações, has signed a definitive agreement to sell its Salinas group of lithium properties to PLS Brasil Mineração, a wholly owned subsidiary of PLS Group.

The deal covers ten mineral claims in the Salinas project, which includes the Baixa Grande lithium resource, located in the Lithium Valley region of Minas Gerais, Brazil.

The agreement stipulates a total purchase price of $37.5m in cash.

Of this, $30m is to be paid upon closing, with the remaining $7.5m due at the earlier of a positive final investment decision (FID) for PLS’s Colina Project, which is adjacent to Baixa Grande, or by 31 December 2029.

In addition to the cash consideration, Lithium Ionic will retain a 2% royalty interest on future sales of spodumene extracted from Baixa Grande.

The royalty is to be calculated as 2% of proceeds from the sale of all spodumene, determined on a free-on-board basis, after certain allowable deductions.

Lithium Ionic CEO Blake Hylands said: “Salinas demonstrates the value our team creates through disciplined exploration. We entered the district in early 2023 and, in under two years, advanced it from first drill holes to a spodumene mineral resource.

“This Transaction crystallises that value for shareholders without dilution, at a constructive point in the lithium cycle, and the Royalty keeps shareholders exposed to Baixa Grande’s potential future development under PLS, one of the largest hard-rock lithium operators in the world.”

Lithium Ionic stated that anticipated proceeds from the transaction will support early-stage works and construction-readiness activities at its wholly owned Bandeira Lithium Project in Lithium Valley, Brazil.

The sale enables the company to focus its resources on developing Bandeira, and that transaction proceeds represent a value increase over its original investment in Salinas.

The completion of the transaction remains subject to closing conditions customary for deals of this nature and is anticipated within 10 business days.

BMO Capital Markets is providing financial advisory services to Lithium Ionic, with Cassels Brock & Blackwell and TozziniFreire Advogados acting as legal counsel in Canada and Brazil, respectively.