Riversgold (ASX:RGL) has finalised an exclusive option agreement to acquire 7 lithium-prospective projects, together called the Abigail Lithium Project, in the James Bay district of Quebec, Canada.
The new projects lie between Critical Elements’ (TSX.V:CRE) Rose lithium deposit, which has a probable reserve of 26.3 million tonnes (Mt) @ 0.87% Li2O, and Nemaska Lithium’s Whabouchi deposit, with 36.6Mt @ 1.3% Li2O.
Riversgold, which has a $11.41 million market capitalisation, says its strategy at the Abigail Project will be to identify potential lithium-rich pegmatites located in granites, such as those seen at the Rose Lithium deposit, or potential lithium-rich pegmatites located within greenstones, such as the Whabouchi deposits.
The terms of the acquisition include an exclusivity fee to conduct technical and corporate due diligence activities for a period of 120 days comprising C$75,000 cash, C$200,000 estimated exploration program cost, and 16.4 million Riversgold fully paid ordinary shares at an issue price of $0.014 per share, subject to shareholder approval.
In the event that shareholder approval is not received for the share issue, the vendors of Abigail Lake will be entitled to C$200,000 cash.
Subject to the completion of due diligence activities, the vendors of Abigail Lake will receive C$75,000 cash, 73.8 million Riversgold fully paid ordinary shares at $0.014, and a 2% net smelter return on all minerals mined from the projects.
Exploration activities are planned to begin in September this year with the aim of confirming previously identified anomalies and to ground-truth and map the relevant geological interpretation from the 2016 and 2017 field programs.
To conduct due diligence exploration activities, Riversgold has engaged specialist Canadian exploration team Silverwater Exploration Services, which has lithium experience in the region.
Depending on the results of the 2023 program and the completion of the acquisition, Riversgold plans to conduct a more comprehensive greenfields generation program in the early 2024 field season, assuming the results warrant such a program.
The company’s share price has increased by 8.33% to $0.013 as of 1:15pm AEST on Thursday 31 August.
Commenting on the acquisition, Riversgold Chairman David Lenigas says: “The Abigail Lithium Project in Quebec is blessed with year-round access for exploration, and the current exploration program, planned to commence in 2 weeks, will be managed by the same exploration team who identified the project’s potential lithium anomalies back in 2016/17.”
“The Abigail Lithium Project in Quebec is blessed with year-round access for exploration“
Riversgold is an exploration company focused on discovering and developing ‘large’ lithium systems in the Pilbara and Yilgarn cratons of Western Australia. As of 30 June 2023, the company had $4.911 million cash and cash equivalents at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au