Kidman Resources has bought two lithium tenements from nickel miner Western Areas in a $6 million all-scrip deal, while Lithium Australia has signed a memorandum for a joint venture in Germany.
Kidman Resources has bought two lithium tenements from nickel miner Western Areas in a $6 million all-scrip deal, while Lithium Australia has signed a memorandum for a joint venture in Germany.
The land adjoins existing Kidman tenements containing the Earl Grey lithium deposit in the Forrestania belt.
Kidman has also agreed to pay a $15 per tonne fee for all lithium classified as reserve, and a 1.5 per cent royalty on gross revenue from all future production.
There’s an additional benefit beyond the exploration potential, according to Kidman.
The two tenements will also be useful as haul roads or a waste dump for the company’s Earl Grey deposit, the company said,
Kidman Resources managing director Martin Donohue said it was an exceptional deal.
“This additional ground has the potential to expand the Earl Grey resource, based on preliminary drilling by Western Areas, which shows that the pegmatite continues into this area and the deposit potentially remains open to the east,” he said.
“In addition, the expanded ground position will provide us with far greater flexibility to adopt the most optimal site layout for the Earl Grey development.”
Shares in Western Areas fell 1.3 per cent to $2.37 each at the close of trading, while shares in Kidman were 1 per cent lower at 47.5 cents each.
Meanwhile, Lithium Australia has signed a memorandum of understanding with German company Tin International to earn into the Sadisdorf lithium deposit in Saxony, Germany.
The West Perth-based company can hold 15 per cent of the joint venture by spending €750,000 on exploration (about $1 million) by the end of 2017.
Lithium Australia can then take its holding to 50 per cent by spending a further €1.25 million (about $1.7 million) over three years.
The company has been developing a technology it hopes can reduce recovery costs for lithium, which it calls Sileach.
Lithium Australia managing director Adrian Griffin said there was a lithium “halo” through and around the resource.
“This is a great opportunity to establish a substantial lithium resource to feed a Sileach processing facility in Europe,” he said.
Shares in Lithium Australia last changed hands at 16.5 cents each, 2.9 per cent lower.
