Photo by: Reuters
PERTH (miningweekly.com) – Juniors Pilbara Minerals and Mineral Resources (MinRes) have reached an agreement to resolve the dispute over a sales notice and right of first refusal over product from the Pilgangoora lithium project, in Western Australia.
The two companies have been embroiled in a battle since Pilbara earlier this year issued a sales notice in relation to the proposed sale of lithium under an offtake agreement with General Lithium.
MinRes argued that the sales notice did not allow the company the opportunity to purchase lithium products under the same terms and conditions as those offered to General Lithium, with the company earlier this month launching court proceedings against Pilbara.
Under the terms of the agreement struck between MinRes and Pilbara, MinRes would permanently relinquish its right of first refusal and a 2.5% royalty payment in exchange for a stake in Pilbara Minerals, and committing to support the development of the Pilgangoora project.
MinRes will be issued with A$50-million of Pilbara Minerals shares, based on a 48c a share. The shares will be issued under Pilbara Minerals' placement capacity and will not require shareholder approval.
In addition, the two parties have also agreed to collaborate to explore and exploit possible synergies that could exist between MinRes’ Wodgina project and the Pilgangaoora project, to mutual benefit.
Pilbara Minerals MD and CEO Ken Brinsden told shareholders on Tuesday that the company was pleased the parties had been able to resolve the dispute in a commercial manner.
“Importantly, this means that the royalty, which formed part of the original terms for the acquisition of the underlying Pilgangoora tenements, has now been paid in full with no following obligations. In addition, the right of first refusal over the existing and future offtake and product sales agreements for lithium has now been extinguished forever.”
Brinsden said the agreement meant Pilbara could move ahead to complete remaining offtake agreements, as well as project permitting and financing, and to start the development of the Pilgangoora project.
Court proceedings will also be discontinued, and the dispute resolution process before an independent expert will be closed.