Megado Minerals (ASX:MEG) has signed a binding term sheet with DG Resource Management (DGRM) to acquire the K Lithium Project in the James Bay region of Quebec, Canada.
The K project complements the $9.67 million market capitalisation company’s Cyclone Lithium Project and increases its total land package in the James Bay region to 146km-square.
Upon the deal’s completion, Megado will initiate exploration activities on the ground with a view to identifying and sampling pegmatite outcrops and establishing drill targets for testing later this year.
In return for the project, Megado will make a cash payment of C$30,000 and issue the seller 6 million options exercisable at A$0.08 within 3 years. Megado will also grant DGRM a 2% net smelter royalty over all minerals extracted from the project other than lithium and lithium products, which will attract a 2% gross overriding royalty.
Megado also notes material conditions precedent including the company obtaining all necessary shareholder, third-party, and regulatory approvals required to complete the acquisition, as well as the signing of a consulting agreement with Dahrouge Geological Consulting, a related party of DGRM.
Commenting on the acquisition, Megado Minerals Chief Executive Officer (CEO) and Managing Director Ben Pearson says: “Acquisition of the K Project further enhances our North American footprint and is consistent with our strategy of securing prospective exploration projects that provide exposure to the green energy transition.
The deal metrics for the K Project were compelling, especially considering that competition for assets in the James Bay region is fierce. We thank DGRM for putting their faith in Megado’s capabilities.”
“The deal metrics for the K Project were compelling”
Megado notes it is ‘highly encouraged’ by the historical field observations and samples from the project area, which indicate pegmatites are present on the property.
According to Megado, highly anomalous levels of lithium, along with elevated levels of caesium, tantalum, and rubidium, are ubiquitous indicators of lithium-caesium-tantalum (LCT)-type pegmatites fertile for lithium mineralisation.
Megado Minerals is an ASX-listed mining exploration company with assets in Idaho, US, and the James Bay region in Quebec, Canada. As of 30 June 2023, the company had $2.3 million cash at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Megado Minerals
