Mineral Resources has signed a joint venture (JV) agreement with New Age Metals at the Manitoba lithium projects in Canada.
Under the JV, Mineral Resources can acquire an initial 51 per cent interest after it spends $C4 million ($4.3 million) on exploration and development activities within 42 months of the farm-in period commencing.
Mineral Resources can earn up to a 75 per cent interest if it reaches a final construction decision of the project.
New Age Metals is a Canadian-based explorer that was previously aiming to find a strategic parter for its lithium portfolio.
“The stated mandate for our lithium division since acquisition of our projects was to secure a strategic partner with exploration, development, and production expertise, and this agreement with Mineral Resources fulfills our objective,” New Age Metals chairman and chief executive officer Harry Barr said.
“Mineral Resources is one of the world’s largest lithium producers with a current market capitalisation of approximately $9 billion.
“This agreement comes at an opportune time in the market where North American lithium demand is high and there is a growing need to introduce local supply to meet that demand.”
New Age has seven lithium projects in Manitoba with a maiden drill program expected for the Lithium Two project, which contains a mineral resource of 544,000 tonnes at 1.4 lithium oxide, in October 2021.
“Manitoba is an underexplored region in North America for lithium and rare elements. This is a strategic transaction for New Age shareholders as it provides both a non-dilutive financing for the development of our substantial lithium division through a partnership with one of the world’s largest producers and the flexibility to finance our share of the projects through various methods.
“Our phase one exploration plan is to complete a maiden drill program at our Lithium Two project and ground proof geophysical targets that were identified earlier this year.”
Mineral Resources operates two hard rock lithium mines in Western Australia, including the Mt Marion and Wodgina mines.