Sayona Mining Limited (ASX: SYA) has announced the signing of an Earn‐in Agreement with leading lithium producer Altura Mining Limited.
The company reported that the agreement is aimed at developing its exploration portfolio in the world‐class Pilgangoora lithium district of Western Australia.
According to the terms of the agreement, Altura will commit $1.5 million on exploration over 3 years to earn a 51% stake, providing potential for new lithium discoveries.
Sayona reported that the Earn‐in ensures that the value of its Australian projects is maximised at minimal cost to shareholders, with the Company focused on delivering a sustainable and profitable new lithium mine in Québec.
Sayona’s current WA lithium portfolio
Sayona’s Pilbara leases cover some 1806km2 and are centered in the world class Pilgangoora lithium district. This is located close to Altura’s Pilgangoora mine, which commenced commercial production in March 2019.
Sayona has now signed an Earn-in agreement aimed at expanding the value of its portfolio in Western Australia’s world‐class Pilgangoora lithium district.
Terms of the Earn-in agreement
According to the terms of the Earn‐In Agreement, Altura has to spend $1.5 million on exploration within three years to earn a 51% stake in the tenements.
The agreement states that in case Altura wishes to withdraw, it must spend at least $500,000 on exploration expenditure, including at least 2,500 metres of drilling on the Mallina project and 1,000m on the Tabba Tabba project.
The terms confirm that Sayona will retain a 49% stake, subject to possible future potential dilution in line with any increased spending by Altura, should Sayona not wish to participate.
The company also reported changes in management structure, with Sayona’s director, James Brown, as well as Non‐Executive Directors Allan Buckler and Dan O’Neill becoming directors of Altura.
Earn-in aids Sayona’s Québec project
Sayona’s primary focus has been in the development of its Authier Lithium Project. Sayona had acquired 100% of the Authier project in July 2016.
A definitive feasibility study has shown the project’s potential to become a sustainable and profitable mining operation, generating new jobs, investment and wealth for stakeholders and supporting the development of Canada’s lithium industry.
Sayona expressed confidence that with the inking of the Earn-in agreement, it can ensure that its funds are maximised towards the highest likelihood of increased shareholder returns at the Authier project as well.
Sayona’s Managing Director, Mr. Lynch said that Altura was the perfect partner to crystallise value for shareholders from the Company’s Australian lithium assets.
Altura’s Managing Director, James Brown, who is also a Director of Sayona, said the agreement was a win‐win deal for both companies.
Sayona’s Managing Director, Mr. Brett Lynch said: “Altura has a highly experienced in‐house team that successfully led the financing, construction and commissioning of its spodumene mine at Pilgangoora.
It is this expertise that will ensure we derive maximum value from our exploration assets in WA.
It is rare for such a close alignment of two companies, but this deal is truly one that benefits both, particularly given our priority on advancing our flagship Authier Lithium Project in Québec.
We can now ensure that our funds are maximised towards the highest likelihood of increased shareholder returns, with the added upside of any potential new discoveries in Australia.”
Altura’s Managing Director James Brown said: “Our common directors and shared experiences have given us a mutual understanding that will allow the potential of Sayona’s Australian exploration tenements to be fully explored.
For Altura, having access to Sayona’s exploration portfolio provides enormous upside in terms of our project pipeline and we are determined to advance exploration activity as quickly as possible for the benefit of all.”