Aurora Energy Metals (ASX:1AE) has executed a term sheet to sell an 85% interest in its namesake lithium project in Oregon, US to Macro Metals (ASX:M4M), formerly called Kogi Iron.
Aurora will retain the remaining 15% interest and 100% of the non-lithium rights, to focus on the development of its Aurora Uranium deposit.
Macro has been granted an exclusive 3-month option period to conduct due diligence and complete formal documentation for a fee of $50,000. The option period may be extended by mutual agreement for a further 3 months through an additional option fee payment.
If the option is exercised, Macro will issue Aurora just over 666 million ordinary shares at a deemed issue price of $0.003 (equivalent to 20% of the Macro shares on issue post transaction) plus an additional 666 million options (in 3 equal tranches exercisable at $0.008, $0.012, and $0.016 all within 5 years).
Aurora will be free carried on lithium expenditure on the project until the completion of a positive Definitive Feasibility Study (DFS) on the project.
Aurora Managing Director Greg Cochran, who is expected to speak at this year’s Global Uranium Conference in Adelaide on 16 November, says this deal allows the company to focus on its uranium deposit during a time of record-high prices.
“The proposed transaction with Macro allows Aurora to focus on the development of our advanced, large-scale, and well-defined uranium deposit, whilst retaining leverage to the increased value of lithium exploration via our significant shareholding in Macro post-transaction.”
Macro Metals Non-Executive Chairman Peter Huljich says the deal offers a drill-proven opportunity situated within the US’ largest lithium province — the McDermitt Caldera — which is host to both Lithium America’s (TSX:LCA) Thacker Pass and Jindalee Resources (ASX:JRL) McDermitt Lithium Project.
Lithium mineralisation is found in soft lakebed sediments above and surrounding the Aurora Energy Metals Uranium Project in southeast Oregon.
Macro notes the deal follows lithium-focused drilling which returned lithium grades up to 1,663 parts per million (ppm) and confirmed the presence of lithium mineralisation over an area of more than 1,500m by 2,000m, with mineralisation open in all directions.
Write to Adam Drought at Mining.com.au
Images: Aurora Energy Metals