PERTH (miningweekly.com) – ASX-listed Galan Lithium has struck a deal with fellow-listed Lithium Australia to acquire an 80% interest in the Greenbushes South lithium project, in Western Australia.
Under the terms of the agreement, Galan will issue 1.22-million shares to Lithium Australia to form an unincorporated joint venture (JV). Galan will further sole-fund the JV expenditure until the completion of a prefeasibility study.
Following the completion of the prefeasibility study, the two parties will contribute to project spend on a pro-rata basis, or will withdraw and retain a 2% net smelter royalty in the project area.
If Lithium Australia’s interest in the project dilutes to below 10%, it will withdraw from the JV and will have its interest converted to a 2% net smelter royalty.
“We are delighted to acquire a significant majority stake in a highly prospective lithium project in a world-renowned lithium district, and increase our existing lithium exploration ground at Greenbushes,” said Galan MD Juan Pablo Vargas de la Vega.
“We have secured an outstanding exploration opportunity in Western Australia to add to our existing portfolio of assets in Argentina that have a potential production profile. We will proceed to exploring this tenure in a methodological step-by-step manner and progress tenement applications to grant. We are pleased to JV with Lithium Australia and look forward to updating the market with our development in due course.”
The Greenbushes South project is located some 3 km from the Greenbushes lithium mine, which is one of the world’s largest, highest grade hard rock spodumene deposits.
Lithium Australia MD Adrian Griffin on Thursday said that the company’s divestment of a major interest in the Greenbushes South project was consistent with its ongoing strategy to advance proprietary downstream lithium and battery technologies and to deliver an ethical and sustainable supply of energy metals for batteries through innovative minerals processing and battery recycling techniques.
“Lithium Australia is pleased to partner with Galan, a dedicated explorer that will drive the Greenbushes South lithium project forward.
"This transaction means that the company reduces its financial commitment and exploration risk, yet retains significant lithium commodity exposure by way of both Galan shares and a 20% project equity.”