iTech Minerals (ASX:ITM) has executed a farm-in joint venture with SQM Australia, which will earn up to 70% interest in the Reynolds Range Lithium Project in the Northern Territory.
As part of the final condition to form the farm-in transaction, SQM will pay iTech $2 million in exchange for an initial 30% stake in the lithium mineral rights of licences EL33881, EL23888, EL28083, which has since been approved by the Central Land Council.
Under the terms of the agreement, SQM will retain the option to increase its stake to 51% by spending an aggregate $7 million in exploration costs over the next four-and-a-half years, on the condition of hitting the minimum $2 million mark in the first 18 months.
The company will then be required to offer iTech an additional $3 million, along with a minimum JORC-compliant resource estimate of 50 million tonnes @ 1% lithium oxide or additional exploration spending marked at $15 million to boost its interest to a 70% stake.
SQM will then be able to pay its one-off success fee, calculated based on the content of lithium oxide uncovered in the resource estimate, on the return of a Definitive Feasibility Study and decision to mine.
iTech Managing Director Mike Schwarz explains that the company is looking forward to building a “valuable and productive” relationship with SQM through exploration at the project.
“With SQM initially funding and managing all aspects of lithium exploration and development, iTech can focus its resources on exploration of the antimony and gold potential of the Reynolds Range tenement package of which it retains 100% ownership,” Schwarz says.
By streamlining this farm-in joint venture over the lithium rights, iTech, which has a market capitalisation of $10.54 million, has revised its cash balance to $5 million.
iTech Minerals is a mineral explorer focused on advancing its portfolio of assets in the Northern Territory and South Australia.
Write to Maddison Elliott at Mining.com.au
Images: iTech Minerals
