Red Dirt Metals (ASX:RDT) acquires Electrostate in potential $25m deal

• Red Dirt Metals (RDT) acquires lithium explorer Electrostate for an initial payment of $15 million worth of company shares
• Red Dirt will issue a further $10 million in shares to the sellers upon the release of a minerals resource greater than 15 million tonnes for the Yinnetharra lithium project in WA
• Electrostate currently owns the Yinnetharra project, which it says has been subject to limited exploration so far but has still returned results of up to 1.49 per cent lithium oxide and 142 ppm tantalum pentoxide
• Red Dirt has submitted programs of works for approval, and once these are granted, it will explore the limits of the pegmatites
• Shares in Red Dirt are up 5.11 per cent and were trading at 72 cents at 2:47 pm AEST

Red Dirt Metals (RDT) has acquired lithium explorer Electrostate for an initial payment of $15 million worth of company shares.

As part of the deal, Red Dirt will issue just over 26.4 million shares at 56.7 cents per share to make up the initial payment.

The company will then issue a further $10 million worth of Red Dirt shares upon the release of a mineral resource greater than 15 million tonnes for the Yinnetharra lithium project in WA within four years following settlement.

Electrostate currently owns the Yinnetharra project, which Red Dirt said lay in a fertile lithium-caesium-tantalum (LCT) terrain and covered a total area of 520 square kilometres.

It comprises six tenements: three granted tenements and three pending tenement applications.

While the project has so far been subject to “limited” exploration, the presence of multiple LCT-bearing pegmatites with excellent grade and width in the area has been confirmed.

Further, exploration work has encountered significant grades of near-surface mineralisation, with up to 1.49 per cent lithium oxide and 142 parts per million (ppm) tantalum pentoxide intersected.

Red Dirt has submitted programs of works for approval and said once these were granted, it would explore the limits of the pegmatites in the area.

“The Yinnetharra lithium project represents an excellent early stage LCT-bearing project with obvious scope and scale to deliver a very large-scale operation,” Managing Director Matthew Boyes said.

“When our team assessed the prospectivity of the Yinnetharra project, we were attracted by the multiple pegmatite occurrences near surface and outcropping over an extensive area.

“Upon completion of this acquisition, the company will fast-track the mobilisation and commencement of an initial drilling programme, aiming for commencement prior to the end of the calendar year.”

Shares in Red Dirt were up 5.11 per cent and were trading at 72 cents at 2:47 pm AEST.