TSX-V-listed Cypress Development is eyeing a prospect near its Clayton Valley lithium project, announcing on Wednesday that it could potentially earn a 50% interest in fellow-listed Dajin Resources’ Alkali Spring Valley property.
Spring Valley is about 12 km north-east of Cypress’ Clayton Valley project, in Nevada. Dajin has located 145 unpatented placer mining claims to explore for lithium brines and has applied to the state of Nevada for 1 000 acre-feet a year of water rights.
Under a non-binding letter of intent with Dajin, Cypress has the exclusive right and option to acquire a 50% undivided interest in Dajin’s unpatented mining claims and application for water rights in Esmeralda county.
Cypress will complete a due diligence review and prepare a definitive agreement for the transaction, upon which it will allot to Dajin 150 000 shares and $50 000.
Cypress will have a two-year period to complete earn-in by issuing an additional 150 000 shares and performing $200 000 in exploration expenditures within the first year, and $250 000 in exploration expenditures during the second year.
Upon successful completion of the two-year earn-in period a joint venture (JV) will be created. Should Dajin elect not to participate following Cypress’ earn-in, Dajin shall have the option to dilute to a 10% net profits interest on the value of the JV’s property in Alkali Spring valley.
“We look forward to working with Dajin on the exploration of the Alkali Spring Valley Lithium Property, and we appreciate their work to date towards obtaining related water rights. We particularly welcome the prospect to explore synergies with our Clayton Valley lithium project,” said Cypress CEO Bill Willoughby.