Delta Lithium doubles down on JV deals 

Delta Lithium (ASX:DLI) (formerly Red Dirt Metals) has executed two multi-million-dollar farm-in joint venture (JV) agreements with both Voltaic Strategic Resources (ASX:VSR) and Reach Resources (RR1).

The JVs will help the company expand its presence in the emerging Gascoyne province in Western Australia.

As of 12pm AEDT shares in Reach Resources had increased by 75%, while Voltaic had witnessed a 10% increase. 

Delta, which has a $227.78 million market capitalisation, says the agreement with Voltaic is binding and follows a period of due diligence. 

The agreement, which has been executed as part of the next phase of exploration at Voltaic’s Ti Tree Lithium Project, will reportedly expand the potential and scale of Delta’s Yinnetharra Lithium Project, which houses a 26 million tonne @ 1% lithium oxide resource.

Delta can earn an 80% interest in Voltaic’s 212km-square Ti Tree project through a $12 million two-stage earn-in over a 4-year period. 

To earn the majority interest, Delta must spend $3 million of exploration expenditure within 24 months, with a minimum spend of $1 million (stage one), and spend a further $6.25 million in expenditure, or alternatively deliver a Mineral Resource Estimate (MRE) greater than 10 million tonnes @ 0.8% lithium oxide, within 3 years (stage two). 

If successful, Voltaic may secure a total $1.5 million cash or scrip payment from Delta upon start and completion of stage two, at which time Voltaic can elect to either maintain its 20% interest by co-contributing; or divest this stake to Delta at fair market value.  

The agreement also exposes Voltaic to ‘significant’ near-term catalysts associated with project development activities and a de-risked pathway to production and cashflow. 

Cash secured by Voltaic as part of the agreement brings its total cash reserves to $7.25 million, which will be used to accelerate exploration at its Paddys Well and Meekatharra projects, as well as investigate accretive acquisition opportunities. 

Delta Lithium Managing Director James Croser says the company now has granted access to the entire Leake Springs metamorphic stratigraphy on Voltaic’s ground, which boosts the potential for a long-life lithium operation.

“Voltaic shareholders are poised to directly benefit from the significant growth prospects of this promising project, bolstered by a markedly lower risk profile and access to our extensive on-site presence at Yinnietharra.”

Voltaic CEO Michael Walshe says this deal positions Voltaic for ‘substantial’ near-term project development catalysts, and Delta’s robust balance sheet, provides a ‘significantly’ de-risked route to production and cashflow. 

“Entering a mutually advantageous strategic partnership with Delta Lithium is an excellent outcome for both companies and will see Voltaic receive an immediate payment of $1.25 million that further bolsters our already robust pro-forma cash reserves to $7 million. 

Delta has rapidly advanced Yinnetharra, completing greater than 115,000m of drilling and delivery of a significant maiden resource within just over a year since acquiring it. 

This effort is ongoing, with extensive exploration and resource definition drilling programs in progress and very ambitious near-term plans to grow the Project into a globally significant lithium resource.”

Delta also today (11 March 2024) has executed a farm-in JV agreement with Reach Resources to secure additional tenements surrounding Yinnetharra. 

The additional tenements comprise the Morrissey and Camel Hill projects, cover 413km-square and sit adjacent to and along strike from the emerging resource already defined at the Malinda deposit, within Yinnetharra. 

The agreement brings Delta’s total landholding in the emerging Gascoyne lithium province to 1,769km-square, a 30% increase. 

Delta will issue Reach a non-refundable $3.2 million cash payment. To earn 80% in both the Morrissey and Camel Hill projects, it must spend a further $9 million on exploration over an initial 2-year period from 9 March 2024 and an additional 2 years from stage one completion. 

The stage one earn-in includes the formation of an unincorporated JV between both parties to explore for minerals in the desired tenement areas. Meanwhile, stage two includes a further $6 million being spent on expenditure.  

Like Voltaic, Reach Resources can elect to either maintain or divest its 20% JV interest once stage two of the earn-in is complete. 

Further, in the event Delta delineates a MRE equal or greater than 7.5Mt @ 0.8% lithium oxide at any time within 8 years of the commencement date, Delta has agreed to pay Reach $10 million in either cash and/or scrip. 

Reach Resources CEO Jeremy Bower says: “Importantly, we have ensured the final 20% has uncapped upside, with this portion to be negotiated in good faith between Reach and Delta. 

Combined with our recently announced rights issue to raise up to $2 million, and further subject to shareholder approval being obtained to consolidate the capital of the company, Reach will re-emerge with a tight capital structure and over $6 million cash.”

Delta Lithium is focused on rapidly advancing its Mt Ida Lithium Project towards production, while conducting an ‘aggressive’ exploration program at its ‘highly prospective’ Yinnetharra Project. 

As of December 2023, the company had $116 million cash at hand, according to its latest presentation.

Voltaic Strategic Resources is a rare earths, lithium, base metals, and gold explorer with assets in Western Australia and the US. 

Reach Resources is a critical minerals explorer with a portfolio of tenements in the Gascyone mineral field. 

Write to Adam Drought at Mining.com.au

Images: Delta Lithium
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.