Premier1 Lithium (ASX:PLC) has executed a non-binding letter of intent (LOI) with Mineral Mining Services (MMS) for a development partnership over the Wadgingarra prospect’s resource area and a drill-for-equity agreement in Western Australia.
The LOI establishes a framework to progress Wadingarra towards development and provides a potential funding pathway for drilling, while aligning Premier1 with an experienced mining services provider.
Under the partnership, MMS will fund and manage all development and commercialisation activities within the partnership area. This includes heritage and environmental approvals, resource development drilling, mine planning, geotechnical and metallurgical studies, mining lease applications, and operational services.
Premier1 will retain responsibility for maintaining the tenements and meet statutory obligations outside the partnership area. MMS will be entitled to recover its development costs from early project cashflows, after which both companies will share the profits.
Further, the LOI sets out the framework for a drill-for-equity agreement, under which MMS may provide drilling services across the company’s exploration portfolio. Drilling costs will be settled through cash and Premier1 shares.
Initial drilling will focus on the Yalgoo Project, with scope to extend to other areas of the portfolio by mutual agreement.
Managing Director Jason Froud by combining MMS’ operational expertise with Premier1’s exploration pipeline, the company is positioning Wadgingarra to move quickly from resource definition towards growth and development.
Wadgingarra has an inferred resource of 150,000 tonnes @ 2.7g/t gold containing 13,000 ounces.
As previously reported, over the past year, the junior explorer has been positioning itself to take advantage of the strong long-term fundamentals of the gold and copper markets, while also still not losing sight of the lithium potential.
A previous review of historical exploration data revealed the potential for gold and copper mineralisation within the company’s project portfolio.
Froud says Premier1 is positioning itself across commodities that are both in demand and aligned with global growth trends, while retaining exposure to lithium for the future.
“While lithium remains important to us – and we are well positioned to benefit when that market improves – as a junior it is difficult to justify significant lithium exploration expenditure in the current environment,” he tells Mining.com.au.
“Gold and copper, on the other hand, provide the strongest uplift from exploration success.”
Mineral Mining Services is a Perth-based mining services provider that has experience in mine development, operational and technical management and heavy haulage, across multiple projects in Western Australia.
Premier1 Lithium is a Western Australian mineral explorer focused on gold, copper, and lithium.
Write to Aaliyah Rogan at Mining.com.au
Images: Premier1 Lithium
