JOHANNESBURG (miningweekly.com) – TSX-listed Nevada Sunrise Gold has signed a letter agreement for the option of buying water rights in the Clayton Valley of Nevada.
The pre-existing water rights, valued at $1.42-million, allowed for 1 770 acres a year of water use for mining and milling.
"The acquisition of water rights is an important step toward the potential development of any lithium brine discoveries on our Clayton Valley exploration properties," said CEO Warren Stanyer.
"We believe that any consumption of water in the Clayton Valley requires valid water rights to meet State regulations, especially in Nevada, the most highly-regulated state for water use in the US,” he added.
In December 2015, Nevada Sunrise received a written appraisal from an independent appraiser certified in the State of Nevada. According to the report, the Clayton Valley basin was currently "overappropriated", with the Albemarle Silver Peak lithium mine being the largest consumer of water in the area.
The report further stated that any new application for water use in an overappropriated basin would be carefully reviewed by the Nevada Division of Water Resources, adding that it was uncertain if any new applications would be granted.
In consideration for an option to buy the permit, Nevada Sunrise has agreed to pay the vendors a combination of cash, common shares and common share purchase warrants.
Nevada Sunrise currently had three lithium exploration projects in the Clayton Valley, which hosted known lithium brine deposits, including the Silver Peak lithium mine.