Talga Group (ASX:TLG) has signed an earn-in agreement with lithium giant Sociedad Química y Minera de Chile (SQM) (NYSE:SQM) to jointly progress the Aero Lithium Project in northern Sweden.
Under the agreement, SQM can earn up to 70% interest in Aero by funding up to US$19 million ($28.52 million) in exploration spending over a seven-year period.
Talga, which has a market capitalisation of $216.45 million, will retain all rights and obligations over graphite minerals at Aero, and will receive a management fee for each stage of the earn-in deal. A ‘success fee’ will also be paid to Talga should a decision to mine be made.
Talga Managing Director Mark Thompson says partnering with SQM offers a chance to build a European lithium supply for the green transition.
“As one of the few potentially large-scale lithium hard rock opportunities in Europe, Aero might be significant to the region’s battery and electric vehicle industry,” he says.
After completing the earn-in, the parties must contribute expenditure in proportion to their participating interest or dilute in accordance with customary joint venture terms.
The deal also provides for collaboration between Talga and SQM on potential new lithium areas and projects in Sweden, but remains subject to Swedish foreign direct investment clearance.
SQM CEO Mark Fones says the agreement reflects the company’s dedicated efforts to build a globally competitive lithium portfolio.
“Expanding into new and promising jurisdictions, such as Sweden, has been a strategic goal for us, and partnering with Talga, (which) has demonstrated expertise in the region, further enhances this achievement.”
Talga Group is focused on developing sustainable battery materials via innovative technology and vertical integration of its wholly owned Swedish graphite resources.
Write to Aaliyah Rogan at Mining.com.au
Images: Talga Group
