Posted on 21 Mar 2024
Australian miner Mineral Resources (MinRes) is adding more lithium assets to its portfolio with a farm-in agreement on the Horse Rocks lithium project in Western Australia, Kallanish reports.
Exploration company Lord Resources said in a statement on Wednesday it has entered into a strategic partnership with MinRes. The latter will spend AUD 1 million ($651,810) in exploration to earn 40% of the project, which is located 8 kilometres west of the Mt Marion lithium mine owned by MinRes and China’s Ganfeng.
The deal remains subject to the satisfaction of conditions, including MinRes completing a positive due diligence on the tenement. MinRes will have 18 months to earn the right to acquire the initial 40% stake. The company will also have an option to further increase its stake through Stage 2 and Stage 3 farm-in obligations.
If they decide to expand the partnership, then a joint venture will be created in Stage 2 with MinRes earning a further 30% interest in the project for an extra AUD 5m in expenditure in three years. In Stage 3, a further 15% stake could be earned by funding expenditure through to a decision to mine. At that point, MinRes would own 85% of the project.
Lord Resources says both companies are interested in jointly developing Horse Rocks, building on the previous exploration that identified “multiple stacked LCT [lithium-caesium-tantalum] pegmatite swarms.”
If the farm-in agreement reaches the third stage, Lord can remain in the JV and contribute to future costs or convert its interest to a 1.5% royalty.
The tenement, located 20 km south of Coolgarie, is in the heart of a well-known lithium mining district. Other projects nearby include Future Battery Minerals’ Kangaroo Hills, Liontown Resources’ Buldania, Widgie Nickel’s Faraday and Lord’s Jingjing project.
Horse Rocks is considered prospective for pegmatite-hosted lithium, nickel sulphide and orogenic gold mineralisation.
MinRes did not comment on the agreement. Earlier this week, the company announced intentions to convert a nickel concentrator plant into a lithium processing hub. The miner will purchase Poseidon Nickel’s Lake Johnston project. The new hub will process fines from MinRes’ Bald Hill and Mt Marion lithium operations, new discoveries made by the company and third-party ore in exchange for project equity.
Source:Kallanish
