- Sayona Mining (SYA) is acquiring Lithium Royalty’s right to purchase a 60 per cent interest in the Moblan lithium project in Quebec
- The majority interest is currently owned by Guo Ao Lithium and the other 40 per cent is owned by mineral explorer, SOQUEM
- SYA says the project ticks all the right boxes and considers it to be an important asset for future growth
- Sayona entered a trading halt regarding the buy and an upcoming capital raise which may fund the consideration price of US$86.5 million (A$120.3 million)
- Company shares last traded at 17.5 cents on September 29 and Sayona expects to come out of the halt by October 4
Sayona Mining (SYA) has agreed to acquire the Moblan lithium project in northern Quebec.
The company entered an agreement with Lithium Royalty Corp (LRC) to acquire its right to purchase the 60 per cent interest in Moblan which is held by Guo Ao Lithium. Sayona will acquire the interest from Guo Ao for US$86.5 million (A$120.3 million).
The other 40 per cent of the Moblan project is owned by SOQUEM, a wholly owned subsidiary of Investissement Quebec. SOQUEM has waived its right of first refusal in connection with this acquisition.
Prior to the acquisition announcement, Sayona entered a trading halt flagging its intention to make a ‘significant’ acquisition and complete a capital raise. While SYA hasn’t yet disclosed how it’s spending the funds, it’s likely they’ll go towards the Moblan purchase.
The Moblan Lithium Project has a foreign mineral resource estimate of 12.02 million tonnes at 1.4 per cent lithium dioxide. It hosts high-grade spodumene mineralisation with previous exploration including 132 diamond holes for around 15,560 metres, establishing a 1.5-kilometre strike.
Sayona believes there’s potential to expand the resource and is undertaking follow-up work of previous drilling, which intersected up to 29.1 metres of spodumene-bearing pegmatites outside the resource.
Managing Director Brett Lynch was pleased with the acquisitiom.
“Moblan is a tier‐one project comparable to any of the region’s top hard rock lithium mines. It has potential for further expansion and will be an important asset for Sayona’s future growth,” he said.
“We have been monitoring opportunities for further expansion in Québec and this ticks all the right boxes. There is a huge opportunity here for Sayona to develop a new lithium asset base in Northern Québec, adding to our Abitibi lithium hub.”
Agreement terms
Guo Ao’s 60 per cent interest includes certain mineral claims, technical data and studies, as well as its rights in its joint venture with SOQUEM.
LRC has agreed to pay Sayona US$5 million (A$6.96 million) in exchange for a gross overriding revenue (GOR) royalty on the Moblan interest and a further US$500,000 (A$695,300) for a 1.5 per cent GOR royalty on Sayona’s WA-based Mallina project.
For another US$3 million (A$4.2 million), Sayona will grant LRC a 2 per cent net smelter return royalty on the Tansim project.
Sayona and LRC will also enter an offtake agreement regarding the Moblan project.
Once the acquisition closes, which is expected by October 15, Sayona will pay LRC a US$1 million (A$1.39 million) structuring fee to acquire the Moblan interest.
Company shares last traded at 17.5 cents on September 29. Sayona expects to come out of the halt by October 4.