- Gold Mountain (GMN) signs an agreement with Mars Mine for the option to acquire up to a 75 per cent interest in four project areas in north-eastern Brazil
- The company has 60 days to complete due diligence and gain shareholder approval to exercise its option and buy an initial 20 per cent interest in the lithium projects
- It will then be required to spend $2.75 million on the projects over two years to increase its interest to 75 per cent
- Gold Mountain says these projects, which are situated in known lithium-bearing pegmatite areas, will diversify its portfolio and increase shareholder value
- The company has placed its shares in a trading halt ahead of an upcoming capital raise, with shares last trading at 0.6 cents
Gold Mountain (GMN) is looking to acquire up to a 75 per cent interest in a package of prospective lithium licences in north-eastern Brazil.
The company signed a binding heads of agreement with Mars Mines for the option to acquire a majority stake in the tenement package, which comprises five lithium projects (four project areas) that cover a combined area of 285 square kilometres.
The projects include the Cerro Cora, Porta D’Agua, Custodia, Juremal, and Jacurici projects.
These projects lie in areas that host lithium-bearing pegmatites as well as along-strike from and covering known pegmatite bodies.
GMN CEO Tim Cameron said he was excited about the proposed acquisition of the “highly prospective” lithium projects in north-eastern Brazil.
“Over the last number of months, we have been reviewing a range of potential acquisition opportunities to diversify our project portfolio,” Mr Cameron said.
“We believe that, given the location and commodity, these projects offer the company the best opportunity to increase shareholder value.”
Under the agreement, Gold Mountain paid Mars Mines a $30,000 option fee and issued it 30 million ordinary GMN shares, granting Gold Mountain an exclusive 60-day period to conduct due diligence and gain shareholder approval to exercise the option.
Subject to successful due diligence and shareholder approval, Gold Mountain will pay $570,000 through a combination of shares and options to acquire an initial 20 per cent stake in the projects.
If Gold Mountain then solely funds $2.75 million across the projects over two years, being the farm-in period, it will increase its interest to 75 per cent.
Following the completion of the farm-in, both companies will fund exploration in accordance with their respective interests or dilute per standard dilution metrics, with Gold Mountain as the manager of the joint venture.
Gold Mountain plans to begin exploration in November.
Following today’s announcement, GMN entered a trading halt ahead of an upcoming capital raise.
Shares in Gold Mountain last traded at 0.6 cents and are expected to come out of the halt by Wednesday, September 21.