Dynamic Metals Ltd (ASX:DYM) is trading higher on news that its “landmark” lithium joint venture with Mineral Resources Ltd (ASX:MIN) (MinRes) on the Widgiemooltha Project is now complete with the parties having satisfied all conditions precedent for the JV.
This agreement involves MinRes paying Dynamic Metals $5 million in cash and spending $15 million on exploration at Widgiemooltha over four years.
The Widgiemooltha area — 100 kilometres south of Kalgoorlie — has emerged as a significant lithium belt, hosting numerous spodumene deposits, and Dynamic’s project is well inside the lithium 'goldilocks zone'.
Dynamic’s project is within 25 kilometres of the Mt Marion, Bald Hill and Buldania projects and is in close proximity to MinRes’s lithium operations in Western Australia.
Investors have welcomed the completion of the JV with shares as much as 26% higher in early ASX trading to A$0.17.
Landmark JV and farm-in
Dynamic entered into a binding term sheet for a farm-in and joint venture with MinRes and a wholly-owned subsidiary in March 2024, and the parties have now formed a 40%/60% unincorporated joint venture.
Dynamic has received $4 million in cash from MinRes, with a further $1 million to be paid in July 2025 in exchange for 40% of the lithium mineral rights on the Widgiemooltha tenement package (Stage 1).
MinRes has the ability to increase its stake to 65% by sole funding an additional $15 million of exploration expenditure on the tenements over the four years following completion.
It can then further increase its stake to 80% by sole funding expenditure through to a decision to mine. If MinRes earns 80% interest Dynamic can opt to remain in the joint venture and contribute to joint venture expenses or convert its interest into a royalty.
Dynamic managing director Karen Wellman said: “We are very pleased to announce the successful formation of the significant joint venture with MinRes on the Widgimooltha Project lithium tenements.
“As a leader in Australia's lithium sector, MinRes brings invaluable technical expertise to the project and we are looking forward to their commencement of the exploration program."
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