ASX-listed mining exploration company St George Mining (ASX:SGQ) has entered a binding agreement to potentially acquire an interest in the lithium and nickel rights of certain tenements in the Mt Holland region of Western Australia as part of the Mt Holland Area of Influence Agreement.
The company says the Area of Influence extends out to a radius of 30km from the centre of the Bounty Gold Mine TSF1, and it excludes the lithium and nickel rights to tenement E77/2784.
Under the agreement, St George will pay $150,000 cash and issue 3.125 million fully paid ordinary shares to private company Cacique Resources to enter into an option to acquire 80% of the lithium and nickel rights of any tenement that Cacique applies for or acquires in the Area of Influence. This right will last for 80 years.
“The agreement provides St George with an option to potentially acquire a foothold in this highly prospective region”
St George reports it intends to seek shareholder approval in a general meeting on 16 March 2023. If this approval is not obtained, the company will be required to pay in cash the higher of $250,000 and 3.125 million shares multiplied by the volume weighted average price (VWAP) for St George shares for the 5 trading days prior to 16 March 2023.
If the company selects a tenement for option, it will be required to pay Cacique an additional fee of $100,000 and, subject to shareholder approval, issue Cacique $200,000 worth of St George shares prior to the grant of that tenement. If shareholder approval is not obtained, St George will be required to pay the higher of $200,000 cash and the value of those shares based on a VWAP of 5 trading days before the grant of that tenement.
Commenting on the agreement, St George Mining Executive Chairman John Prineas said: “We are very pleased to have conducted the binding agreement for this opportunity which relates to part of the world-class Mt Holland-Forrestania lithium and nickel province.
The agreement provides St George with an option to potentially acquire a foothold in this highly prospective region and to further build upon St George’s high-quality portfolio of lithium and nickel projects in Western Australia.
As we prepare to resume drilling at our Mt Alexander Lithium Project in a matter of days, we are also excited to have expanded our project pipeline into one of the most significant addresses in WA for hard-rock lithium and nickel sulphide mineralisation.”
If St George wishes to exercise an option, it will be required to pay $300,000 cash per tenement with a maximum of $1.5 million collectively, but will have to pay out the full $1.5 million if at least 1 option is exercised within 5 years from the date of the exercise of the first option. The company also notes an option expires after 5 years.
For example, if over 5 years from the exercise of the first option St George only acquires 2 tenements, it would have paid $600,000 and need to top-up with another $900,000. If St George acquires 10 tenements, the maximum payable is $1.5 million.
Where St George exercises an option to acquire 80% of the lithium and nickel rights, both companies will form a joint venture (JV) pursuant to which Cacique is free carried to a decision to mine. Cacique will also retain 100% of other mineral rights including gold.
St George Mining is a mining exploration company focused on creating shareholder value through the discovery of ‘world-class’ deposits across Western Australia. The company’s portfolio includes the Mt Alexander Nickel-Copper Sulphide Project, the Paterson Project which is prospective for copper and gold, as well as the Ajana Nickel-Copper-PGE Project.
