Minerals exploration and development company Pursuit Minerals (ASX:PUR) reports it is on track with its takeover of Trilogy Minerals, with Trilogy raising $8 million and acquiring 4 lithium licences in Argentina as part of the pre-acquisition conditions.
The company says the funds raised through the issue of convertible notes (Trilogy Class B Notes) have been used to exercise options over the Maria Magdalena, Isabel Segunda, Sal Rio 02 and Sal Rio 1 tenements in the Rio Grande Sur Project near Salta.
It also reports it is continuing due diligence on Trilogy and its assets, and advises shareholder approval for the acquisition will be sought in early February.
Pursuit Minerals Managing Director Bob Affleck says: “The completion of the $8 million raise by Trilogy, which formed a critical condition precedent, has been completed and significantly reduces the risk profile of the acquisition as 4 of the 5 lithium licences have now been secured.
“Pursuit has continued its due diligence without any complications arising to date. Lithium prices continue to be in excess of $85,000 a tonne”
Pursuit has continued its due diligence without any complications arising to date. Lithium prices continue to be in excess of $85,000 a tonne.
The Notice of Meeting is currently being finalised with the meeting to be held in early February 2023.”
Pursuit’s tilt for Trilogy began in December last year with the signing of a binding agreement.
Key terms of the consideration payable to Trilogy shareholders subject to a 12 month escrow period for the acquisition of 100% of the issued capital in Trilogy is the issue of over 372.916 million fully paid ordinary Pursuit shares, over 285.644 million Class A Performance shares, over 222.894 million Class B Performance Shares, and over 201.477 million Class C Performance Shares that will all convert into Pursuit shares.
The company also reports consideration payable to the holders of Class A Notes in consideration for cancellation and release of the Trilogy Class A Notes is the issue of over 335.416 million Pursuit shares, with 75% of these securities will be under voluntary escrow with 25% released each quarter post settlement.
In addition to this, consideration payable to the holders of Class B Notes in consideration for cancellation and release of the Trilogy Class B Notes is the issue of over 666.666 million Pursuit shares (equivalent to $0.012 per Pursuit share).
Pursuit reports remaining conditions precedent for the acquisition of Trilogy include due diligence and shareholder approval, as well as regulatory and third party approvals.
This consists of completing financial, legal and technical due diligence on Trilogy and the tenements, obtaining all necessary shareholder approvals, as well as necessary regulatory and third party approvals.
The Rio Grande Sur Project covers around 27,500 hectares encompassing a NI43-101 inferred resource of 2.1 million tonnes of lithium carbonate equivalent (LCE) at an average grade of 370 milligrams of lithium (Li) to a depth of 100m.
Pursuit states there is no material difference between the NI43-101 and JORC classifications. It also outlines that mineral resources are not mineral reserves and the inferred resources have not demonstrated economic viability.
Following the completion of the acquisition, Pursuit intends to conduct a work program that incorporates additional deep resource definition drilling that, along with pump and porosity testing, will enable the evaluation of both the resource and reserve base for conversion to mineral resources and ore resources that can be reported in accordance with the JORC Code.
This work is expected to be completed within 2 years and will be funded using internal cash reserves currently being raised as part of the transaction.
Pursuit also reports it intends to undertake an initial exploration program consisting of TEM surveying, and a desktop study to convert the NI43-101 resource to a JORC compliant resource and interpret the salar geology and hydrogeology to define drilling targets.
The planned drilling program includes completing around 4,000m of diamond drilling (DD), sampling core and brine, as well as delivering core samples for drainable porosity laboratory tests, and delivering brine samples for chemical analysis and performing short-term airlift tests to obtain preliminary results.
The exploration program will also include a pumping well and a long-term hydraulic test, with the latter being considered ‘vitally’ important to assess the sustainability of the brine quality for future production.
Concurrently, Pursuit states it will advance chemical engineering works focusing on the building of a Stage One Processing Plant with the intention of producing 2,000 tonnes per annum of lithium carbonate.
Pursuit Minerals is a mineral exploration and project development company focused on platinum group element-nickel-copper (PGE-Ni-Cu) and gold (Au) projects in Western Australia. The company holds the Warrior PGE-Ni-Cu and Gladiator Gold Projects.
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