iTech Minerals (ASX:ITM) has entered into a binding memorandum of understanding to partner with Sociedad Química y Minera de Chile (NYSE:SQM) to develop the Reynolds Range Lithium Project in the Northern Territory.
SQM is a global lithium-focused company which is focused on developing and producing diverse products for several industries essential for human progress.
The company is bringing its financial and technical resources to develop Reynolds Range, which covers 375km2 in the Aileron Province, part of the Paleoproterozoic North Australian Craton.
Under the three-stage agreement through its subsidiary SQM Australia, SQM has the option to earn 100% of lithium rights of the Reynolds Range project.
Subject to completing due diligence, SQM will earn 30% in the lithium rights by paying an initial fee of $2 million. An unincorporated joint venture will be established afterwards.
Under the second stage of the agreement, SQM can earn a 51% interest by spending an additional $7 million on exploration within four and a half years of the start date, with a minimum spend of $2 million within the first one and a half years.
Upon electing to proceed to the third stage, SQM will pay iTech an additional $3 million.
As part of the third stage, SQM can earn a 70% interest by defining a mineral resource estimate exceeding 50 million tonnes at 1% lithium oxide or equivalent or spending an additional $15 million on exploration.
Managing Director Mike Schwarz says the project is a new lithium pegmatite discovery in the Northern Territory.
“With high-grade rock chips of up to 8% lithium oxide at the GMF pegmatite and known pegmatites outcropping over the entire 60km tenement package, iTech believes it will take the technical capability and financial resources of one of the world’s largest lithium chemical producers, like SQM, to fully capture the value of this exciting new project,” Schwarz says.
“With SQM initially funding and managing all aspects of lithium exploration and development, iTech can focus its resources on exploration of the copper and gold potential of the Reynolds Range tenement package of which it retains 100% ownership.”
During the entire earn in period, SQM will operate the project.
Both companies will create a technical committee to oversee the development of the Reynolds Range Project. The committee will have equal representation of members from SQM and iTech.
The company notes there are no shareholder approvals required to proceed the transaction.
iTech Minerals is a battery and critical minerals focused explorer and developer with assets across Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Sociedad Química y Minera de Chile
