Vancouver-based Cypress Development has potentially secured the future water requirements for its Clayton Valley lithium project, in Nevada, announcing on Thursday that it would buy water rights from Nevada Sunrise Gold.
The companies entered into a water rights purchase and sale agreement for Nevada Sunrise’s Intor Resources subsidiary’s water rights permit in Clayton Valley for $3-million.
The permit allows for 1 770 acre-feet a year of water for mining, milling and domestic use. This amount represents the largest volume of permitted water available in Clayton Valley, which is a fully-appropriated hydrogeographic basin. With the exception of a single limited use permit, the Nevada Division of Water Resources has maintained that no new water is available within the Clayton Valley basin for appropriation.
Nevada Sunrise has had to defend the validity of the permit in recent years, including negotiating a 2019 settlement agreement with Albemarle.
Clayton will pay for the permit with a combination of cash and shares. The purchase price includes an initial non-refundable cash payment of $150 000 and a final payment of $2.85-million on receipt of all necessary approvals and transfer of the permit. The closing payment comprises $2-million in cash and the issuance of Cypress common shares to the value of $850 000.
“With the completion of the agreement, Cypress is a big step closer to securing water rights for our Clayton Valley lithium project,” said president and CEO Bill Willoughby.