Sociedad Química y Minera de Chile S.A (NYSE:SQM) subsidiary SQM Australia has agreed to pay $10 million to Novo Resources (ASX:NVO) for a 75% interest in 5 of Novo’s lithium-nickel tenements, forming the Harding Battery Metals joint venture (JV) in Western Australia.
The agreement also includes an option over additional Novo Pilbara exploration tenements.
Under the agreement, Novo, which has a market capitalisation of $44.45 million, will retain 25% interest, along with 100% ownership of the gold, silver, platinum group elements, copper, lead, and zinc mineral rights.
The company will continue to explore for these minerals across these tenements.
Novo Resources acting Chief Executive Officer (CEO) Mike Spreadborough says Novo will receive an immediate $10 million payment that further boosts cash reserves.
“SQM has been very active in the Western Australian lithium sector with a 19% shareholding in Azure Minerals (ASX:AZS), and a 50% JV with Wesfarmers in Mt Holland, that among other investments demonstrates that SQM clearly sees the potential of Western Australia for battery metals, as do we for golf.
This joint venture expands Novo’s lithium exploration exposure given the existing lithium Quartz Hill JV with Liatam Mining.”
Novo’s 25% interest in the tenements will be free carried by SQM until a decision to mine is made by the Hardine Battery Metals JV participants.
The company says it is entitled to a contingent success payment based on the tonnes of lithium contained in a JORC-compliant ore reserve upon completion of a Feasibility Study.
Argonaut PCF acted as financial advisor in relation to this transaction.
The Harding Battery Metals JV sits adjacent to Azure Minerals (ASX:AZS) Andover Lithium-Nickel Project in the West Pilbara region, near Roebourne in Western Australia.
Novo Resources is a gold explorer with a prospective land package covering more than 10,000km-square across Western Australia and Victoria.
SQM Australia is a wholly owned subsidiary of Sociedad Química y Minera de Chile S.A.
Write to Aaliyah Rogan at Mining.com.au
Images: Novo Resources
