PERTH (miningweekly.com) – Lithium hopeful Zenith Minerals has struck a deal with privately held Bradda Head to jointly unlock the potential of its US and Mexican lithium projects.
Under the terms of the transaction, Bradda will refund Zenith some A$660 000 in expenditure on the project sites, and will fund $5-million in exploration spend over three years to earn a 55% project interest. Zenith can then choose to contribute at 45%, or be free carried at 30%, to the end of project feasibility studies on the two projects.
Bradda will be required to spend a minimum of $500 000 on exploration on the projects and drill at least one project before it can withdraw.
In addition, Zenith has also received commitments from Bradda owner Jim Mellon and other investors for a concurrent share placement of A$1.5-million, comprising 15-million Zenith shares at 10c each, with one free attaching option for every five shares issued.
“Having evaluated several alternative funding models for these high-class offshore lithium projects, including spin-out at this relatively early stage, we are very pleased to have concluded a landmark deal that provides funding to rapidly advance the portfolio and also provides us with a timely cash injection,” said Zenith MD Michael Clifford.
“We believe aggressive exploration has the potential to add considerable value to these projects and we very much look forward to a successful partnership with Bradda Head, as together we now accelerate groundwork on the projects.”