Chariot Resources (ASX:CC9) has entered a term sheet with Chinese partners for a proposed partner-funded drilling and potential direct shipping ore (DSO) program across its Nigerian lithium portfolio.
The company has signed the binding term sheet with Xiamen C&D (SSE:600153) subsidiary C&D (Hainan), Hong Kong ZhongNuo Energy (HKG:3633), and C&C Minerals for work at one project selected from the Fonlo, Iganna, and Saki project areas.
Under the proposed structure, ZhongNuo will fund and undertake a minimum 1,500m diamond drilling program and, subject to satisfactory results, fund and operate potential trial mining. C&D will then act as the offtake buyer and US dollar payer for qualifying DSO.
The parties have agreed to a 90-day exclusivity period to complete site reviews, select one project, and negotiate a definitive agreement. C&D has paid Chariot a refundable US$100,000 ($140,624) exclusivity fee.
Potential phase one trial mining is capped at a maximum 240,000 tonnes of DSO — a contractual maximum, not a production target. Chariot notes no mineral resource estimate or ore reserve has been estimated for any of the project areas.
Proposed commercial structure
If executed, Chariot has proposed to establish a special-purpose vehicle owned 66.667% by Chariot and 33.333% by Continental Lithium. The vehicle would hold short-term mining and marketing rights, sell qualifying DSO to C&D, and receive sale proceeds.
Net DSO sale proceeds after applicable costs would be allocated proportionally between the special-purpose vehicle and ZhongNuo, with the larger share payable to ZhongNuo to reflect its proposed funding and operation of the program.
C&D would then provide Chariot with a US$500,000 interest-free prepayment on execution of the definitive agreement, amortised against future DSO invoices.
DSO pricing will be determined under an agreed formula linked to the Shanghai Metals Market China battery-grade lithium carbonate price. No party would be required to mine, sell, or deliver a shipment where the calculated DSO price falls below US$150 per dry metric tonne.
Chariot Executive Chair and Managing Director Shanthar Pathmanathan says the term sheet provides a ‘structured’ pathway to evaluate one project from the Nigerian portfolio with proposed partner funding.
“The phased structure is important: the parties must first complete site reviews, diligence and drilling, and the commercial program would proceed only if definitive agreements are executed and all conditions are satisfied,” Pathmanathan says.
Substantive arrangements take effect following execution of a definitive agreement and satisfaction of conditions precedent, including due diligence, completion of the Nigerian portfolio acquisition announced in July 2025, and confirmation of mineral titles.
The parties must select one project during the exclusivity period, negotiate the definitive agreement, and complete the acquisition prior to commencement of drilling.
Chariot Resources is an explorer focused on the discovery and development of lithium opportunities in Nigeria. Its portfolio consists of four project clusters covering 257.1km² across the Oyo and Kwara states.
Write to Paula Fabe at Mining.com.au
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