Mineral Resources has struck a deal worth up to $20 million to buy an interest in the lithium rights held by junior miner Dynamic Metals across its Goldfields exploration project.
ASX-listed Dynamic Metals told the market it had entered into a binding term sheet for a farm-in and joint venture deal with a MinRes subsidiary for its Widgiemooltha project 100 kilometres south of Kalgoorlie.
It comes after MinRes boss Chris Ellison flagged that the miner had reached the end of its lithium junior miner acquisitive streak, and that it was instead doing incremental deals with gold miners to acquire lithium rights.
MinRes will pay $5 million cash for 40 per cent of all lithium mineral rights held across the Widgiemooltha tenement package.
Dynamic said its flagship Widgiemooltha project could be prospective for nickel, gold, and lithium, although it said the lithium potential is yet to be fully assessed.
Upon completion, the two parties will then form a 40/60 joint venture, with MinRes having the option to up its stake to 65 per cent by sole funding an additional $15 million worth of exploration.
MinRes could then increase its foothold to 80 per cent by sole funding expenditure through to a decision to mine, according to the ASX statement.
West Perth-based Dynamic said MinRes’ nearby Bald Hill mine may offer a pathway to production for any discoveries on the Widgiemooltha project
Dynamic Metals managing director Karen Wellman said the Widgiemooltha project was a regionally significant tenement package that had yet to be fully assessed for its lithium potential.
“Although we have had some encouraging results with our first pass exploration activities, the sheer size of the project means that it would likely have taken Dynamic many years and considerable expenditure to assess its potential and realise value,” she said.
“We are excited by this transaction as MinRes is a leader in the lithium sector in Australia, with the technical expertise and financial capabilities to do the project justice.”
Dynamic will retain the rights to explore for all other minerals, excluding lithium, across the project. It also owns a nickel and lithium exploration project in the South-Eastern Goldfields and another early-stage exploration project near Meekatharra.
