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    Argosy to acquire Tonpah Lithium project in USA

    Argosy Minerals Limited (ASX: AGY) announced that it has exercised the option to purchase the tenements comprising the Tonopah Lithium Project in Nevada, USA.

    The project is located ~4km from Albemarle’s Silver Peak lithium brine operation, the only lithium carbonate producer in the USA.

    Argosy believes that this is a significant opportunity to leverage its lithium brine processing expertise over an expanded asset base.

    With the Rincon Lithium Project operational and being further de-risked, Argosy has secured a strategic foothold in a world-class mining jurisdiction.

    It may be noted that lithium is included in the USA’s list of ‘critical minerals’ and actions are being prepared to further support US lithium domestic resource development.

    Tonopah lithium project

    The Tonopah lithium project (TLP) is located within the Big Smokey Valley region in Nevada, USA, and comprises 425 claims covering an area of ~34.25km².

    The Project is within a 40 minute drive from the regional mining centre of Tonopah, 336km from Las Vegas and 380km from Reno, Nevada; translating to a high quality regional and site infrastructure.

    AGY noted that the project is located in one of the world’s most favourable and stable mining jurisdictions and home to the USA’s burgeoning electric vehicle industry, with well-developed infrastructure and a skilled local workforce.

    Exercising the mining claims sale agreement

    AGY announced that it has advised the project vendors; LCME Holdings Inc., Big Smokey Exploration LLC, ProspectOre LLC, and ProspectOre Inc. via an Exercise Notice that it has irrevocably exercised the Purchase Option under the Mining Claims Sale Agreement dated 14 August 2019, and confirmed the Completion Date as being 6 September 2019.

    Terms of sales agreements

    Argosy reported that the material terms of the Sale Agreement include the sale of a 100% interest in TLP, consisting of 425 Claims, in Esmeralda County, Nevada, United States of America; a US$10,000 cash payment to the Vendors (completed); and a due diligence period ending on 26 August 2019, and at which time Argosy can make a purchase election (completed).

    The agreement states that upon making the purchase election, Argosy will pay the Claims renewal costs, for each of the 425 Claims, by 1 September 2019, comprising the Federal Annual Mining Claim Maintenance Fee (approximately US$165 per claim); and the County Mining Claims Fee (approximately US$12 per claim).

    The sales agreement also includes purchase price of US$50,000 to the Vendors.

    The agreement also states that upon releasing a Project milestone for a JORC Mineral Reserve of one million tonnes of LCE Product or first commercial production, Argosy will make a milestone payment of A$500,000  to the Vendors.

    Opportunity to apply Argosy strategy

    Argosy said that TLP provides a relatively very cheap and low-risk opportunity to take an early stage lithium brine project and apply the Argosy strategy to advance TLP. It may be noted that this strategy was demonstrated at AGY’s Rincon Lithium Project.

    Lithium part of ‘critical minerals’ list

    Lithium is listed on the US Government’s 2018 Final List of 35 Minerals Deemed Critical to U.S. National Security and the Economy.

    The US Department of Commerce had also reported that “unprecedented action” would be taken to strengthen the USA’s critical mineral supply chains, including via support for domestic resource development.

    AGY said that it considers the opportunity to develop a USA based project in a jurisdiction supportive of the commercial development of lithium as a strategic position to further develop Argosy into a world-class lithium producer.

    Next steps

    Argosy said that subject to the successful completion of the sale process, it will consider works to determine the most effective development strategy for the Project.

    The Company said that it plans to secure highly skilled and experienced in-country consultants to assist with advancing the Project.

    AGY said that it will continue proactively working to review and consider new projects in the sector to utilise its established lithium experience and expertise to complement its project portfolio.

    Management comments

    Argosy Managing Director Jerko Zuvela said: “TLP provides an option to further expand our fast-track lithium development strategy, already in place at the Rincon Lithium Project, and secure a strategic foothold in a world class mining jurisdiction.

    This project diversifies Argosy’s global footprint and provides another opportunity to utilise our lithium production experience to potentially develop TLP.

    Our immediate focus and priority remains developing the Rincon Lithium Project and progressing towards construction of the 2,000tpa LCE production operation.”

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    • Delayed Prices (USD) - Last Updated 27-06-2022
    • Gold $1,826.40
    • Silver $21.14
    • Platinum $908.00
    • Palladium $1,802.00
    • Dalian Iron Ore i2209 $113.98
    • Aluminium $2,456.00
    • Cobalt $72,400.00
    • Copper $8,381.00
    • Lead $1,915.00
    • Nickel $22,400.00
    • Tin $24,590.00
    • Zinc $3,350.00