Global Lithium Resources (ASX:GL1) has executed a binding term sheet with global battery metals producer Jiangsu Lopal Tech Group (HKG:2465) for an equity investment of $7.32 million and an offtake prepayment of US$75 million ($104.85 million).
The funding will accelerate the development of Global Lithium’s Manna Lithium Project in Western Australia.
Global Lithium has also entered into a separate binding tenements and mineral rights sale agreement with Jiangsu’s subsidiary, to sell its Marble Bar Lithium Project in Western Australia. Jiangsu will pay $14.85 million for the project, comprising $11.85 million and a contingent $3 million upon granting the mining lease.
Managing Director Dianmin Chen says the arrangements with Jiangsu represent a pivotal advancement in the Manna Project toward a final investment decision on its development.
“The arrangements with Lopal provide a robust initial contribution to fund Manna’s future development, securing critical long-term customer relationships and validating the demand for Manna’s substantial and high-quality lithium resource,” Chen says.
Terms and conditions
As part of the strategic equity investment agreement, Global Lithium will issue around 13.84 million shares to Jiangsu at $0.52875 per share.
Under the 10-year offtake arrangement with Jiangsu, the company will offtake 40% of Manna’s annual actual production.
From starting production, Global Lithium will use reasonable endeavours to supply at least 70,000 tonnes of product per year.
With the new 40% offtake to Jiangsu and existing 30% offtake to Canmax Technologies, the outstanding 30% production quantity is remaining at Global Lithium’s sole discretion.
Global Lithium notes that the divestment of Marble Bar aligns with its strategy to focus its resources and capital on the accelerated development of the Manna Project, while also generating non-dilutive funding.
Global Lithium is a diversified Western Australian explorer and developer. The company has defined a total indicated and inferred resource of 51.6 million tonnes @ 1% lithium oxide at the Manna Project.
Write to Aaliyah Rogan at Mining.com.au
Images: Global Lithium
