Lithium Australia Ltd (ASX:LIT, OTC:LMMFF) has entered an acquisition and joint venture (JV) agreement with Eastern Resources (ASX:EFE) Ltd to sell 70% of the Lepidolite Hill Lithium Project in Western Australia.
LIT will receive total cash consideration of A$550,000 in three tranches as part of the agreement and form a JV with Eastern whereby Lithium Australia’s 30% interest is free carried by its partner until a definitive feasibility study (DFS) for the project has been produced.
Eastern also has the option to buy LIT out for a further A$1,000,000 in cash consideration or shares until a DFS is completed.
Agreement clears path to commercialisation
“This divestment of the majority of the Lepidolite Hill Lithium Project further simplifies the company,” Lithium Australia CEO Simon Linge said.
“Over the past few months, we have defined the commercialisation and growth pathways to deliver customer focused solutions for the lithium-ion circular battery materials industry that will accelerate global electrification for our solutions pathways.
“We are pleased to partner with Eastern Resources (ASX:EFE) who will advance the Lepidolite Hill Lithium Project, while we focus on our technology platforms of lithium extraction, battery materials and battery recycling.”
Eastern Resources will be the initial manager of the joint venture, formed for the purpose of exploration and evaluation and, if warranted, development and exploitation of all minerals within the Lepidolite Hill tenements.
Under the agreement, Lithium Australia and Eastern Resources will collaborate towards an offtake agreement of not more than 30% of lithium product extracted from the Lepidolite Hill Lithium Project.
Prior drilling at the project has indicated its prospectivity for lithium, with results up to 18 metres at 1.45% lithium from 5 metres of depth and 3 metres at 2.43% lithium from 4 metres.