JOHANNESBURG (miningweekly.com) – Australia’s Auroch Minerals has entered the lithium sector with the acquisition of the Hombolo project, in Tanzania, as the company seeks to take advantage of the strong outlook for lithium from the battery market.
Auroch, which recently sold its Manica gold project to Xtract Resources, had made a strategic decision to combine its gold expertise with opportunities in the lithium and tantalum sector.
“Our goal is to develop a portfolio of assets from grassroots to advanced, across several geographical and political jurisdictions to take advantage of the burgeoning battery market,” commented executive chairperson Glen Widdon on Tuesday.
The company was completing due diligence on several other projects worldwide, he added.
Auroch pointed out that the Hombolo project was located adjacent to ASX-listed Liontown Resources Mohanga lithium/tantalum project, where grades of 5.2% lithium oxide and 0.11% tantalum in pegmatites have been announced.
The Hombolo project comprised 21 licences and applications, covering 1 700 km2. Auroch has entered into a condition agreement to buy an Australian company that, through a Tanzanian subsidiary, owned or had the right to these tenements.
Auroch paid a non-refundable deposit of $75 000 for the tenements and would issue 950 000 shares upon signing a binding agreement. Upon shareholder approval of the transaction, the company would pay the seller $75 000 in cash, 2.05-million shares and three-million options exercisable at $00.20.
Further equity milestone payments were also agreed upon, with six-million Auroch shares to be issued over a 36-month period.
Auroch stated that it was well funded with A$10.7-million in cash, marketable securities and receivables. The company had A$3.5-million in cash and A$3.7-million worth of Xtract shares. A further payment of A$3.45-million was due from Xtract in late June.
Widdon pointed out that Auroch had made a strategic decision to focus a portion of the funds it had received from the sale of the Manica project towards the lithium sector.
“We are excited to be committing to the lithium space during this period of massive technological change."