Lord Resources (ASX:LRD) has entered into a binding farm-in agreement with Mineral Resources (ASX:MIN) on the Horse Rocks Lithium Project in Western Australia.
Both companies are interested in jointly developing Horse Rocks, where previous exploration by Lord has uncovered multiple stacked lithium-caesium-tantalum (LCT) pegmatite swarms that display extensive fractionation.
Lord Resources’s share price has spiked 115.68% to $0.110 as of 11.30am today (20 March 2024).
Lord Managing Director Barnaby Egerton-Warburton says: “The agreement validated the strong work Lord has already completed at the Horse Rocks Lithium Project and provides the opportunity to collaborate with a world-class exploration team drawing on their knowledge and expertise of this highly prospective lithium region.”
As part of the agreement, MinRes, which has a market capitalisation of $13.31 billion, has the right to acquire an initial 40% legal and beneficial interest in Horse Rocks by funding $1 million of expenditure within 18 months from the effective date.
MinRes has also the option to further increase its stake through stage two and stage three farm-in obligations, demonstrating its confidence in the project’s potential.
During stage two, a joint venture (JV) will be created, in which MinRes can earn a further 30% interest in the project via funding $5 million in expenditure within 36 months of the start of the stage.
Meanwhile during stage three, MinRes can earn an additional 15% interest, totalling to 85%, by funding expenditure through a decision to mine.
Upon completing stage three, Lord has the option to remain in the JV and contribute to all future costs, or to convert its JV interest to a 1.5% royalty.
The company says this partnership provides non-dilutive funding, as well as access to invaluable knowledge and expertise in lithium exploration and production.
Throughout the farm-in, Lord will be responsible for managing the implementation of exploration and development activities on the tenement with access to geological expertise provided by MinRes to uncover prospective mineral targets on the tenement, further enhancing the exploration process.
Horse Rocks lies in an emerging lithium province in Western Australia, about 8km west of the Mt Marion Lithium Mine.
Lord Resources is a Western Australian-focused green metals explorer with assets considered prospective for battery, critical, and precious metals.
Mineral Resources is a diversified resources company focused on lithium, iron ore, energy and mining services across Western Australia.
Write to Aaliyah Rogan at Mining.com.au
Images: Lord Resources
