Red Dirt Metals (ASX:RDT) has acquired lithium explorer Electrostate, which owns the Yinnetharra Lithium Project in the central Gascoyne region of Western Australia.
The company reports that the $25 million deal includes an initial payment of $15 million worth of company shares. Red Dirt will issue just over 26.4 million shares at 56.7 cents per share to make up the initial payment.
Red Dirt will issue a further $10 million worth of shares upon the release of a mineral resource greater than 15 million tonnes at Yinnetharra within 4 years following settlement.
Upon completion of the transaction, Red Dirt will fast track mobilisation and start an initial drilling program prior to the end of the calendar year.
The settlement of the Electrostate acquisition is subject all necessary approvals, with pending technical and legal due diligence to be completed within 7 business days of today’s signing date (12 September).
Commenting on the acquisition red Dirt Managing Director Matthew Boyes said: “The Yinnetharra Lithium Project represents an excellent early stage LCT bearing project with obvious scope and scale to deliver a very large-scale operation.
This acquisition builds the company’s lithium portfolio and offers excellent growth potential and a future pipeline of projects which are complementary to our flagship Mt Ida Project.
Mt Ida remains on track as our priority near-term project and is focused on accelerating a path towards production. When our team assessed the prospectivity of the Yinnetharra Project, we were attracted by the multiple pegmatite occurrences near surface and outcropping over an extensive area.
“This represents a compelling value-add proposition for the company”
This represents a compelling value-add proposition for the company. Upon completion of this acquisition, the company will fast track mobilisation and commencement of an initial drilling program, aiming for commencement prior to the end of the calendar year.”
The Yinnetharra Project is located about 120km northeast of Gascoyne Junction. The project sits within a tenement package comprised of 6 tenements, 3 granted tenements and 3 pending tenement applications covering an area of 520km-square.
The tenement package is located on a highly prospective LCT bearing belt of metasediments forming a contact with a regional scale granite trending in a north westerly orientation for about 50km.
The project has seen a limited amount of exploration to date although the presence of multiple outcropping LCT bearing pegmatites has been confirmed with excellent grade and widths of spodumene bearing mineralisation intercepted.
Significant intervals of near surface mineralisation have been drilled with lithium bearing pegmatites intersected from surface outcrop with little discernible depletion and leaching of lithium within the shallow weathering profile.
A limited 4km-square portion of the entire 520km-square has been subject to systematic exploration. Significant outcropping spodumene bearing pegmatites have been delineated.
The prospectivity of the tenement package is highlighted by existing soil and rock chip geochemistry in conjunction with previously drilled RC holes.
The company has submitted Programs of Works that are currently pending approval with the intention of exploring the known limits of the pegmatites and stepping out under areas of cover blind to the surface.
Exploration will begin subject to access and permits being granted.
Red Dirt Metals is an exploration and development company focused on bringing the high-quality, lithium-bearing pegmatite deposits located in Western Australia into production. RDT is rapidly advancing its Mt Ida Lithium project towards production with a well-funded pathway outlined, and the advantage of holding existing mining leases and heritage clearance already approved.
To capitalise on the prevailing buoyant spodumene and lithium pricing, RDT recognises that a rapid development pathway will unlock the most value for shareholders. Beyond the Mt Ida Lithium Project, RDT will continue to assess opportunities to increase the lithium portfolio by identifying and adding new potential lithium acquisitions.
Write to Adam Orlando at Mining.com.au
Images: iStock
