Bubalus Resources (ASX:BUS) has signed a binding asset sale agreement with Hardy Metals to acquire tenements E09/2724 and E09/2825 in the Gascoyne region of Western Australia.
The tenements form the Yinnietharra Project, which neighbours Delta Lithium’s (ASX:DLI) Malinda prospect.
Bubalus, which has a $4.9 million market capitalisation, believes the acquisition retains its focus on critical and strategic minerals while providing the opportunity to continue field operations at times when its Northern Territory projects are affected by the wet seasons.
Following today’s announcement, Bubalus shares have spiked almost 76% as of 3.15pm AEST (18 September).
Bubalus will pay 2.34 million shares for the tenements, as well as a $75,000 cash payment to Hardy Metals as a reimbursement for Hardy’s expenditure on the tenements so far. According to Bubalus, the Yinnietharra Project has not been subjected to any previous lithium exploration.
Bubalus has also agreed to pay Inyati Capital a facilitation fee of 15% for introducing the tenements to the company, alongside facilitation services provided in respect of the acquisition.
The completion of the acquisition is subject to satisfaction of customary conditions, including Bubalus completing due diligence on the tenements, obtaining any necessary shareholder approvals required, and all necessary corporate, governmental, regulatory, and third party approvals.
Either party may terminate the agreement by notice in writing if any of the conditions precedent are not satisfied on or before 31 October 2023.
The company has engaged with geological services provider Geolithic to kick off a soil sampling program across the project as soon as it is practical.
Bubalus will also engage with the appointed representatives of the Wajarri Yamatji, the Aboriginal traditional owners of the area underlying the Yinnietharra Project, to obtain the relevant clearances required for drilling on the project.
Bubalus Resources is an ASX-listed manganese and rare earths explorer with assets in the Northern Territory and Western Australia.
As of 30 June 2023, the company had $3.9 million cash reserves at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Bubalus Resources
