Redstone Resources (ASX:RDS) has expanded its Canadian lithium footprint after entering into a 50:50 joint venture (JV) with Galan Lithium (ASX:GLN) to acquire the Taiga, Camaro, and Hellcat Lithium projects.
Redstone, which has a $6.97 million market capitalisation, says these projects collectively comprise 5,187 hectares of tenure in the world-class James Bay Lithium Province adjacent to Patriot Battery Metals’ (ASX:PMT) emerging CV8 and CV13 pegmatite discoveries.
CV8 is located only 1.4km north of Taiga, while the newly discovered CV13 pegmatite cluster is located only 1.5km north of Camaro.
Previous exploration conducted on Redstone and Galan’s James Bay acquisition targets completed by Axiom Exploration identified 28 prospective pegmatite dykes.
Redstone reports it has also secured an option to acquire a 100% interest in the PAK East and PAK Southeast Lithium projects located along Ontario’s ‘Electric Avenue’ alongside Galan.
These Ontario-based projects cover 1,415 hectares and lie adjacent to Frontier Lithium’s (TSXV:FL) PAK Lithium Project, which contains North America’s highest-grade resource and second-largest by size.
Redstone notes these new acquisitions build on its existing Canadian lithium portfolio, which includes option agreements to acquire the Radisson East and Sakami Lithium Projects in James Bay and the Attwood Lake Project in northwestern Ontario.
As of 12:25pm AEDT, Redstone’s share price had increased by 25% to $0.01.
Commenting on the lithium acquisitions and joint venture with Galan, Redstone Chairman Richard Homsany says: “Redstone is delighted to be partnering with Galan to further solidify its exposure to the highly sought after, tier one mining jurisdiction that is the James Bay Lithium district in Québec, Canada, and securing an option in northwest Ontario, another premier lithium area. Redstone has recently commenced operating in Canada and will be the manager of the joint venture.
Galan is a highly experienced lithium exploration business that will bring to the table considerable technical depth and expertise as we aim to accelerate our exploration efforts in the region. Galan is exploring Greenbushes South Lithium Project that hosts the emplacement of the lithium‐bearing pegmatite at Greenbushes and which is approximately 3km to the south of the Greenbushes mine.
These new Canadian assets are a welcome addition to our existing copper and lithium portfolio and further strengthen our strategy of becoming a leading critical metals explorer and developer. Our technical team is also very encouraged by the quality of the areas of the JV projects and nearby high-calibre discoveries, with the James Bay Lithium Projects being adjacent to the Patriot Battery Metals high‐grade CV8 pegmatite discovery and the PAK Lithium Projects situated in Ontario’s Electric Avenue.
“These new Canadian assets are a welcome addition to our existing copper and lithium portfolio and further strengthen our strategy of becoming a leading critical metals explorer and developer”
Redstone has very quickly secured a highly valuable position in two of the world’s premier lithium exploration hotspots, and we are now focused on accelerating our exploration strategy and unlocking value for shareholders.”
Commenting on the lithium acquisitions and joint venture with Redstone, Galan’s Managing Director
Juan Pablo (JP) Vargas de la Vega says securing an option in a premier lithium district of North-West Ontario is pleasing to Galan.
“Both projects are low entry cost ventures into Canada. The JV projects are of quality and situated nearby excellent lithium discoveries, with the James Bay Lithium Projects being adjacent to the Patriot Battery Metals high-grade CV8 pegmatite discovery, and the PAK Lithium Projects situated in Ontario’s Electric Avenue area.
Securing a prospective position in two premier lithium exploration global hotspots is value accretive and complements our exploration efforts in Greenbushes South in Western Australia to create further value for shareholders in parallel with our development and production lithium brine assets in Argentina.”
The key terms of the acquisition agreement include Galan issuing 250,000 fully paid ordinary GLN shares plus a payment of C$500,000 to Infinity Stone Ventures (CSE:GEMS). Galan will also issue 300,000 shares and a payment of C$255,000 to private individuals.
Galan must also make payment of a 3-month option exclusivity fee of C$20,000 to Infinity upon signing the agreement and, upon the exercise of the option, pay an additional C$200,000 and issue C$230,000 worth of shares to Infinity.
Both Redstone and Galan will pay or assume a 2% net smelter return royalty over all of the James Bay lithium projects and PAK lithium projects with a right to buy back one-half of each royalty by payment to each royalty holder of CAD$1 million.
As far as the JV arrangement goes, subject to prior approval of shareholders, Redstone will issue to Galan the lower of 50 million shares or the number of shares equal to C$500,000 divided by the volume weighted average price (VWAP) of RDS shares traded on the ASXffor 5 days prior to the date of approval.
Further, if the Galan option is exercised, Redstone will issue to Galan either another 20 million shares or C$215,000 in shares divided by the volume weighted average price (VWAP) of RDS shares traded on the ASX prior to the date of the option exercise, whichever is lower.
Redstone will be the manager of the JV.
Redstone Resources is a base, precious metals and lithium-focused company exploring its wholly owned prospective West Musgrave Project, which includes the Tollu Copper deposit, in Western Australia.
Galan Lithium is a lithium explorer and developer with assets located in South America’s ‘lithium triangle’.
Together, both companies will develop the James Bay lithium projects located in Quebec, Canada, as well as the PAK South and Southeast lithium projects in Ontario.
Redstone Resources had $1.021 million cash at hand as of 30 June 2023, according to its latest quarterly report.
Write to Adam Drought at Mining.com.au
Images: Galan Lithium
