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Thinly traded microcap Kairos Minerals (ASX:PLS) jumped 35% on Thursday as Pilbara Minerals (ASX:PLS) bought its non-core York acreage for $20M.
Notably, that land is prospective for both gold and lithium. While Pilbara Minerals has indicated it will stay a lithium miner, the $20M consideration also contains a 2% royalty right.
Kairos Minerals’ MD Dr. Peter Turner said on Thursday the company “[intends] to obtain access to all mineral rights” except lithium and tantalum, indicating that PLS probably isn’t interested in mining gold on-site. Kairos thereby retains a 1.38Moz gold resource attached to the Main Trend at the York project.
However, the 2% royalty rate to Kairos also covers any gold sales by PLS subsidiaries.
“We will [also] retain … access to a further 1.4km of the continuous Main Trend mineralisation into the Pilbara ground that we know is well mineralised,” Turner added.
The $20M will go towards development of the larger York project under Kairos’s remit; Pilbara Minerals did not make any announcement to the market regarding its purchase.
Kairos highlighted on Thursday the area of land it has sold falls within its larger York project that GR Engineering “confirmed … has strong potential to be a high-value, robust gold mine.”
While today’s news isn’t any kind of evidence Pilbara Minerals is intending to begin mining gold, it would perhaps provide relief (and value) while lithium prices remain low.
Kairos last traded at 1.1cps.
