Critical Resources (ASX: CRR) has signed a binding terms sheet to acquire the ‘high grade’ Mavis Lake Lithium Project in Ontario, Canada.
The deal with current owners Essential Metals Limited (ASX: ESS) and International Lithium Corporation (TSXV: ILC) will see Critical Resources pay a non-refundable exclusivity fee of $200,000, which will allow for due diligence through until 4th January 2022, followed by $1.5 million cash and 68,000,000 shares @ $0.022 per share. A further issue of 8,000,000 fully paid ordinary shares would be paid to the deal facilitator upon completion.
Further deferred consideration would include $1.5 million cash to the sellers, plus $100,000 fully paid ordinary shares to the deal facilitator upon completion of a JORC-compliant resource measuring no less than 5 million tonnes and containing no less than 50,000 tonnes of lithium oxide at a cut-off grade of at least 0.40% Li2O (Milestone 1), followed by identical respective amounts upon completion of a JORC-compliant resource measuring no less than 10 million tonnes and containing no less than 100,000 tonnes of lithium oxide at a cut-off grade of at least 0.40% Li2O (Milestone 2).
The company notes that completion of the deal is subject to a number of conditions precedent, including but not limited to successful due diligence, a $3.5 million capital raise and shareholder approval.
“The Mavis Lake terms sheet presents an excellent opportunity for the Company to add a high-quality project to our portfolio that further increases our exposure to critical minerals”
Addressing news of the deal, Critical Resources CEO Alex Biggs said: “The Mavis Lake terms sheet presents an excellent opportunity for the Company to add a high-quality project to our portfolio that further increases our exposure to critical minerals. The Company is on a trajectory to become a high growth business focused on building a project pipeline based on asset quality and exposure to in demand minerals. Our focus for this year remains on the upcoming exploration of our Halls Peak base metals asset in New South Wales, Australia which we are very excited about. The Mavis Lake project fits all these requirements and provides an excellent entry to the lithium market with an asset that offers excellent prospectivity in a tier 1 jurisdiction. Due diligence is ongoing, and we will update the market in due course.”
The Mavis Lake Lithium Project is situated 19km east of Dryden, Ontario, within a ‘well-established’ lithium corridor housing multiple projects. The company reports that the ‘Tier-1’ location provides access to critical North American manufacturing markets, including potential offtake partners.
Map displaying location of the Mavis Lake Lithium Project, along with nearby projects and infrastructureCritical Resources has said that the project presents ‘significant exploration potential’, with previous drilling achieving ‘high-grade’ lithium oxide intercepts including:
- 55.25m @ 1.04% Li2O from 80.75m;
- 26.30m @ 1.70% Li2O from 111.9m; including
- 7.70m @ 2.97% Li2O from 130.5m
Mavis Lake is located not far from the Trans-Canada highway, and is also served by a rail network connected to key cities including Thunder Bay, Ontario, and Winnipeg, Manitoba, along with nearby hydro-power infrastructure.
Images: Critical Resources Limited
