Larvotto Resources has bolstered its lithium strategy at the Eyre project in Western Australia after attracting a cornerstone investment from a Canadian institutional fund.
The junior is set to receive $3.4 million in investments from Canadian institutional fund Lithium Royalty Corp. (LRC) and Waratah Capital through its Electrification and Decarbonization Fund (E&D Fund).
The three-tiered royalty, equity and offtake (REO) agreement comprises a $700,000 cash payment to be made by LRC for 1 per cent of gross revenue royalty over lithium and all other pegmatite materials from the Eyre project.
LRC will also make a $700,000 cash payment for 20 per cent of Eyre’s life-of-mine offtake for any lithium materials (including lithium ore, concentrates, sulphates and chemicals).
To complement this, LRC and the E&D Fund will subscribe to a $2 million equity investment involving 11,111,111 shares issued at $0.18 each, with the addition of a free attaching option.
The binding REO agreement, which is subject to certain conditions, will enable Larvotto to expedite exploration at the Merivale lithium prospect and the Eyre project as a whole.
“Bringing a substantial North American institutional fund onto the register is a huge vote of confidence in our assets and management,” Larvotto Resources managing director Ron Heeks said.
Waratah Capital oversees more than $C4 billion in assets and is the founding sponsor of LRC, which holds royalty investments in mid-cap lithium explorers Core Lithium and Sayona Mining.
The 690km² tenement package at Eyre hasn’t been thoroughly explored for lithium, but recent work by Liontown Resources at the neighbouring Buldania lithium deposit has attracted the interest of the investment community.
Heeks said the capital injection significantly improves Larvotto’s balance sheet and enables the company to confidently progress its various drill programs into 2023.