VANCOUVER (miningweekly.com) – Explorer Advantage Lithium has signed a letter of intent (LoI) for an option to earn up to a 70% interest in several lithium brine exploration projects, located in Chihuahua, north-west Mexico, from Radius Gold.
The TSX-V-listed company announced Monday that the four projects were directly analogous to its flagship Clayton Valley project, in Nevada, complementing the company’s existing skill set.
"We are extremely pleased with these lithium brine projects. They are in a closed basin with salar targets and surface-level lithium – directly analogous to Clayton Valley. The region has seen little prior exploration and is an ideal setting for our technical team, which includes the award-winning geologist, Ross McElroy, who has a track record of making major discoveries in underexplored areas," stated Advantage president David Sidoo.
To acquire the option, Advantage will pay $25 000 and a further $50 000, as well as issue 250 000 shares, within two business days of TSX-V acceptance.
Under the terms of the LoI, the company has an option to earn a 55% interest in the projects by issuing 750 000 shares and spending $1.5-million in exploration expenditures over a three-year period.
On exercising its first option, Advantage would then have the option to either form a 55/45 joint venture (JV) with Radius, or lift its interest in the projects to 70% by completing a National Instrument 43-101-compliant preliminary feasibility study within 24 months, following which, it can form a 70/30 JV with Radius.
Advantage has the right, for a period of 60 days after exercising the second option on any project, to buy Radius's 30% interest in the project at a price based on an independent valuation.
Advantage will be the operator of the projects during the option periods.
According to Advantage, the four projects cover about 37 000 ha and are held by claim applications located in the states of Chihuahua (La Union, La Union 2 and Santa Maria) and Coahuila (La Viesca).
The projects are located in large, salar closed basins in geological settings similar to the Clayton Valley basin, in Nevada, which is host to Albemarle's Silver Peak lithium-producing mine.
Historic work in the area by the Mexican Geological Survey included a 1982 drill hole at La Union, which returned a brine sample of 283 ppm lithium. Radius conducted controlled surface samples which resulted in many anomalous lithium results, including 189 ppm lithium at La Viesca.
Advantage stated that the region remained underexplored.
Sidoo, meanwhile, added that the company was “looking forward to working with Radius to close the agreement and begin active exploration”.
Advantage late last month launched a C$642 000 ground geophysics and reverse circulation exploration drilling campaign at Clayton Valley.
It plans to drill about 1 500 m over three drill targets in close proximity to Albemarle’s Silver Peak mine, where brine production wells are situated within about 100 m of the Clayton north-eastern property boundary.
Advantage will also conduct an 11 line kilometre Volterra three-dimensional resitivity ground geophysics survey programme over the entire project area. The survey will have the potential to identify and image conductive horizons to about 600 m depth, as well as to identify subsurface faults.
Despite a land rush by junior exploration companies in Nevada’s Clayton Valley, in response to soaring demand for the critical ingredient of lithium-ion batteries, Advantage is the only lithium explorer in the Clayton Valley, other than Albemarle, with access to certified water rights.