Australian exploration company Charger Metals (ASX:CHR) has signed a binding agreement to buy Lithium Australia’s (ASX:LIT) 30% minority interest in the Lake Johnston Lithium Project in Western Australia.
This acquisition will bring Charger’s interest in the project to 100% of all mineral rights for the southerly Medcalf tenements including the Medcalf Spodumene Discovery, as well as 100% of the lithium rights for the more northerly Johnston Lakes Nickel tenements including the Mt Day Lithium-Caesium-Tantalum (LCT) pegmatite field.
Key terms of the acquisition include Charger issuing 7 million fully paid ordinary shares to Lithium Australia, and granting the offtake first right or refusal to Lithium Australia.
“Charger is pleased to have reached agreement with Lithium Australia to increase its project equity to 100% for lithium discoveries throughout the Lake Johnston Lithium Project”
This grant of the offtake first right of refusal to Lithium Australia covers lithium product to an agreed offtake amount being lower of 30% of the lithium product produced on the sale tenements for the term of the offtake agreement; or the lithium product required by Lithium Australia to produce lithium metal phosphate product through a commercial facility which Lithium Australia has an ownership interest of 25% or more.
To qualify for the first right of refusal, Lithium Australia must make a Financial Investment Decision (FID) prior to 31 December 2029 to construct a commercial facility to produce lithium metal phosphate cathode powders.
From completion of the acquisition, Lithium Australia will retain no ownership interest in the sale tenements, the Lake Johnston Lithium Project, or the Lake Johnston Lithium Project rights acquisition agreement.
Completion of the acquisition is subject to, and conditional on Charger obtaining an opinion from a suitably qualified independent expert on the transaction, obtaining third party deeds or assignment, and obtaining all approvals from shareholders on or before 31 May 2023.
Commenting on the acquisition, Charger Metals Managing Director David Crook says: “With drilling at the Medcalf Spodumene Discovery returning very promising intersections, Charger is pleased to have reached agreement with Lithium Australia to increase its project equity to 100% for lithium discoveries throughout the Lake Johnston Lithium Project.”
Charger reports it has now completed 27 of the planned 40 reverse circulation (RC) drillholes which commenced in late 2022 at Medcalf. Drilling is currently ongoing.
The Lake Johnston Lithium Project is located 450km east of Perth in Western Australia. At the project, lithium prospects occur within a 50km long corridor along the southern and western margin of the Lake Johnston granite batholith.
Charger Metals is an exploration company targeting battery metals, and precious metals in 3 emerging battery mineral provinces in Australia. Along with Lake Johnston, the company’s portfolio includes a 70% interest in the Bynoe Lithium and Gold Project in the Northern Territory, and a 70% to 85% interest in the Coates Nickel-Copper-Cobalt Project in Western Australia.
