- Morella Corporation (1MC) strikes a deal with US-based Lithium Corporation to earn a 60 per cent interest in the North Big Smoky project in Nevada over the next four years
- Morella will earn this initial 60 per cent interest by spending at least US$1 million on exploration and development and paying Lithium Corp $500,000 over the four years
- The company then has the option to pay Lithium Corp another $1.5 million to gain 100 per cent of the project, and Lithium Corp will hold a 2.5-per-cent net smelter royalty
- Morella says the acquisition provides an opportunity to expand its footprint in a well-known, highly prospective lithium region, close to its existing Fish Lake valley project
- Shares in Morella are up 35 per cent and trading at 2.7 cents per share at 11:51 am AEST
Morella Corporation (1MC) has signed a deal with US-based Lithium Corporation to earn a 60 per cent interest in the North Big Smoky project in Nevada over the next four years.
Under the terms of the deal, Morella will earn this initial 60 per cent interest by spending at least US$1 million (A$1.41 million) on exploration and development and paying Lithium Corp $500,000 over the four-year period.
Morella then has the option to increase its ownership of the project to 100 per cent by paying Lithium Corp another $1.5 million. Should Morella exercise this option, it will also grant Lithium Corp a 2.5 per cent net smelter royalty on the project.
Today’s deal follows a letter of intent signed in by the companies in May.
Morella CEO Alex Cheeseman said the North Big Smoky project complemented the company’s existing Fish Lake Valley lithium project and expanded its footprint in a “well-known, highly prospective” lithium region.
“The Big Smoky Valley already hosts several well-established mining operations and has existing infrastructure in place, including energy sources, communications networks, inbound and outbound distribution networks and access to exploration/mining labour,” Mr Cheeseman said.
“With the US government encouraging domestic production of key battery metals and with continued global demand growth for lithium, we are excited to be adding another promising lithium raw material project to our portfolio.”
The company said the project straddled structural features that could be traced on the surface and had been assessed to be a potential conduit for lithium mineralisation in sediments and brines.
Further, Morella said the location of the project “perfectly” positioned the company to support the growing US-domestic lithium and electric vehicle supply chain.
The project is in Nye County, about 110 kilometres north of the regional centre of Tonopah and 240 kilometres southeast of Reno.
Shares in Morella were up 35 per cent and trading at 2.7 cents per share at 11:51 am AEST.