Mineral Resources (MinRes) continues to grow its lithium presence after entering into a farm-in agreement with Marquee Resources regarding the West Spargoville project in Western Australia.
MinRes has the right to acquire an initial 25 per cent interest in the lithium rights at West Spargoville by funding all exploration and development activities and completing a feasibility study on the project, including defining a JORC-compliant resource within 24 months.
The company will need to fund at least $1 million of exploration and development activities at West Spargoville by December 31, 2022, while also footing the $500,000 cost to exercise the Fyfehill option, which was established when Marquee purchased the project from Fyfehill in July 2020.
Once MinRes has successfully funded this initial phase, it can elect to proceed with either a processing farm-in or a mining farm-in.
As part of the processing farm-in, MinRes can earn an additional 45 per cent interest in the lithium rights – bringing its total interest to 70 per cent – by funding West Spargoville until the point of a final investment decision on mine development. The major miner will provide complete pit-to-port services to the joint venture.
If MinRes chooses to go down the mining farm-in route, it can earn an additional 26 per cent interest in West Spargoville’s lithium rights – bringing its total interest to 51 per cent – by funding the project until the development, construction and commissioning of a mine and associated facilities.
If this route is chosen, the two companies would enter into a ‘mine gate sale agreement’ whereby MinRes would be required to build, own and operate all plant equipment and infrastructure related to West Spargoville’s mining operations and buy lithium-bearing ore for a mine gate sale price.
Marquee executive chair Charles Thomas said partnering with MinRes would give West Spargoville the best opportunity to succeed.
“Mineral Resources has an excellent track record and reputation and I am very pleased that a company of their calibre sees the same potential at West Spargoville as the team at Marquee Resources and I do,” he said.
“With the RC (reverse circulation) rig currently turning at the project we look forward to rapidly generating drilling results from the highly prospective West Spargoville project and sharing them with our shareholders.”
MinRes will have four weeks to complete due diligence on West Spargoville before phase one of the farm-in commences.