PERTH (miningweekly.com) – ASX-listed Australian Vanadium has secured an option to earn a majority stake in the Blesberg lithium/tantalum project, in South Africa's Northern Cape province.
The junior told shareholders on Friday that it had secured the right to acquire South African Lithium, which holds the rights to acquire a 50.03% interest in Southern African Lithium and Tantalum (SALT), for seven-million shares.
SALT wholly owns the Blesberg project tenement.
Upon exercise of the option, Australian Vanadium would issue 70-million of its own shares and 40-million performance rights, each convertible within 18 months into Australian Vanadium shares once Australian Vanadium elected to proceed with further exploration of the project, following the completion of a first round of drilling.
A further 40-million performance shares, convertible within three years, will be issued on the announcement of a mineral resource estimate that contains at least 50 000 t of lithium carbonate equivalent.
The shares and performance rights will be issued under the company’s current capacity.
Furthermore, the vendor of South African Lithium will retain a 1% net smelter royalty on all production from the Blesberg project, conditional upon the South African company holding a minimum 50% interest in SALT.
Australian Vanadium will fully fund South African Lithium’s acquisition of the majority interest in SALT by paying $1-million to the current SALT shareholders in three tranches.
Once the exploration earn-in phase has passed, the SALT shareholders will contribute to further project funding or risk having their shareholding diluted. In the event that the shareholders did not participate in ongoing funding, or elected to sell their holding to South African Lithium, Australian Vanadium had the potential to acquire a maximum 74% interest in the Blesberg project.
Mining at Blesberg initially started in 1925, and feldspar production from the mine was reported to be of very high quality. Mining operations ceased in the last decade.
“The expansion of our project pipeline and strategic focus on energy storage minerals generally is common sense and good practice,” said Australian Vanadium MD Vincent Algar.
“The sector is growing and we have a good understanding of all the parts of the puzzle from resource, through mining and value addition to an end product use.
“I believe that the project holds excellent mineral resource potential and represents another great opportunity for the company to become a producer in this growing sector within a relatively short timeframe.”