PERTH (miningweekly.com) – Junior Metals X has signed a deal with fellow-listed Neometals to assist in the development of the Mt Marion lithium project, in Western Australia.

Under a memorandum of understanding (MoU) inked between the two companies, Metals X would lease the lithium mining rights over a portion of its Hampton Area Location 53, which is adjacent to the Mt Marion lithium project, for an initial period of ten years.

The duration of the lease could be extended twice, both for a period of five years.

The lease fee would be A$90 000 a year.

Furthermore, Neometals would be allowed to mine and extract lithium ores from the lease area, and store waste material within the project area. Neometals would be required to pay a A$2/t royalty on all ore mined and processed from the lease area, as well as a 1% net smelter royalty on the sale of any downstream products generated from the lease area.

Metals X has also agreed to sell Neometals an adjoining tenement and associated infrastructure for A$250 000, with Metals X retaining the rights to access and mine gold from the tenement area, and pre-emptive rights over any upstream or downstream sale of the tenement.

“Securing access to Metals X’s ground significantly enhances the Mt Marion lithium project’s potential to become a long-life, globally significant lithium concentrate producer, and is supportive of our focused strategy to become an integrated lithium compound producer and supplier to the lithium-ion battery industry,” said Neometals MD Chris Reed.

He noted that the next step in the project’s development plan was to secure binding offtake agreements before the project partners could consider a final investment decision.

Mt Marion currently hosts a Joint Ore Reserves Committee-compliant resource of 14.8-million tonnes, grading 1.3% lithium oxide. The project was expected to require a capital investment of about $83-million, and would produce around 10 000 t/y of battery grade lithium hydroxide and 8 810 t/y lithium carbonate.