Calidus Resources has established a new lithium exploration joint venture in the Pilbara region of Western Australia, as the company looks to get in on the reviving battery metal.
Calidus has joining forced with Haoma Mining NL to create Pirra Lithium, which will be assigned tenements and lithium rights spanning 1063 square kilometres.
The two companies will share an initial 50 per cent interest in Pirra, with Calidus investing the first $1 million into exploration.
From there, both parties will contribute equally to Pirra’s funding, which will look to capitalise on the known pegmatites within the tenure, some of which have demonstrated tin-tantalum prospectivity as well.
To compensate for Haoma’s previous exploration work in the area, Calidus will also allocate $1 million in scrip at an issue price equal to the five-day volume weighted average price (VWAP).
“Pirra Lithium creates a highly-leveraged exploration opportunity for our shareholders,” Calidus managing director Dave Reeves said.
“There is clearly potential to unlock substantial value by exploring what is highly prospective lithium ground in one of the world’s best lithium provinces.”
The new lithium venture will not compromise Calidus’ Warrawoona gold project in WA, which is estimated to produce a total of 658,277 ounces of gold across an initial 8.3-year mine life.
“We can capitalise on this opportunity without it having any impact on our core asset at Warrawoona, where we are on track to pour first gold in the coming quarter,” Reeves said.
“As part of this strategy to create additional value for our shareholders while maintaining our sharp focus on Warrawoona, we are establishing a separate dedicated team to pursue this lithium opportunity.”
Lithium has experienced a surge to start 2022, with lithium carbonate prices in China breaching 300,000 yuan ($64,830) per tonne in January, trending more than 500 per cent higher than a year before.
One of the most significant commodity trends to emerge in early-2022 has been the lithium price jump as producers are unable to keep up with the world’s insatiable appetite for the resource.
Lithium carbonate prices in China breached 300,000 yuan ($64,830) per tonne in January, trending more than 500 per cent higher than a year before. At the time of writing, lithium carbonate stood at 327,500 yuan per tonne.
Calidus’ share price was $0.79 at the time of writing.