Development-stage phosphate mining company Arianne Phosphate has sold royalties covering 25 mining claims in the James Bay area, Quebec, to Toronto-listed Lithium Royalty Corp (LRC) for C$2.35-million.
The royalty, retained by Arianne as part of an earn-in option agreement first entered into in 2009, provided for a 1.5% net smelter return on the property. These claims currently constitute part of speciality lithium chemicals company Allkem’s James Bay lithium project.
"After a thorough review, there is no doubt the transaction is win-win for both companies," said Arianne Phosphate president Brian Ostroff.
"The purchase by Lithium Royalty Corp allows them to expand their core business while providing Arianne additional financial resources without any dilution to our shareholders.”
LRC CEO Ernie Ortiz said that the transaction added the thirtieth royalty to the LRC portfolio and would be immediately accretive to its net asset value on a per-share basis.
"It adds to our exposure in the James Bay region in Québec, which we believe will be a prolific area for future lithium production. The James Bay project is 100% owned by Allkem, a world-class operator that currently operates the Mt Cattlin mine in Australia, which LRC owns a royalty on, as well as the Olaroz project in Argentina.
“We are looking forward to Allkem's resource update on the James Bay project, which is expected by mid-2023. Allkem has recently completed 19 255 m of resource extension drilling."