- Core Lithium (CXO) has signed an option agreement to acquire six granted mineral leases next to its wholly owned Finniss Lithium Project
- Located near Darwin, the leases include more than 30 pegmatites previously mined for tin and tantalum
- Through its subsidiary Bynoe Lithium, Core will pay Outback Metals and Victory Polymetallic $500,000 in cash for the option to acquire the leases
- If Bynoe exercises the option, $5 million will be paid to Outback and Victory, which will consist of both cash and shares in Core
- Drilling of the mineral leases is expected to begin next quarter, once approved, in conjunction with the 2021 field season
- Core Lithium is up 3.18 per cent to $0.23 per share
Core Lithium (CXO) has signed an option agreement to acquire six granted mineral leases next to its wholly owned Finniss Lithium Project.
Located near Darwin in the Norther Territory, the leases include more than 30 pegmatites that were previously mined for tin and tantalum, and which feature the same high-grade spodumene pegmatites at the Finniss tenements.
Through its wholly owned subsidiary Bynoe Lithium, Core will pay $500,000 in cash to Outback Metals and Victory Polymetallic for the option to acquire the leases.
Should the option be exercised, Bynoe will pay $5 million to Outback and Victory, with $1.5 million to consist of cash and the remaining $3.5 million in either cash of shares in Core.
A contingent payment of $500,000 — $150,000 in cash and $350,000 in either cash or shares — will then be paid for each one million tonnes of JORC resource discovered by Bynoe. This amount will be capped at $5 million.
Australia New Zealand Resources owns the land underlying two of the mineral leases and will receive $25,000 each year from Bynoe as compensation. Bynoe will also pay an additional $50,000 as a security deposit for rehabilitation liabilities, which will be returned once the option agreement is completed.
“The expected increases in resources from this deal and our well-funded resource drill programs at Finniss this year should provide a strong platform for extending and expanding production of lithium from the project as lithium prices increase,” said Stephen Biggins, Managing Director of Core Lithium.
“Spodumene and lithium chemical prices have increased over 50 per cent from lows in 2020, and as Australia’s most advanced lithium developer, Core is right at the front of the line of new lithium production in Australia,” he added.
Core intends to begin drilling at the new pegmatite targets next quarter, subject to approval, in conjunction with the 2021 field season.
Core Lithium is up 3.18 per cent to $0.23 per share at 10:53 am AEDT.