Critical Resources Ltd (ASX:CRR) has completed the key due diligence component of a binding Purchase and Sale Agreement with TSX-V listed Power Metals Corp to acquire the Gullwing-Tot Lakes property neighbouring its Mavis Lake Lithium Project in Ontario, Canada.
Gullwing-Tot Lakes, which is considered to be highly prospective for lithium, covers about 7,518 hectares and is around 5.5 kilometres northeast of the Mavis Lake Main Zone where Critical has been successfully drilling since April 2022.
Enlarged project area
This property, along with the Mavis Lake Lithium Project and recently staked ground, will form an enlarged contiguous project area of approximately 30 kilometres long and 9.5 kilometres wide, with a total area of 22,984 hectares.
The entire Mavis Lake Project area lies within the prospective Sioux Lookout Domain in the Wabigoon Sub-province.
This acquisition, underpinned by continued positive drilling results, strongly aligns with the company’s development focus for the Mavis Lake Lithium Project.
Gullwing-Tot Lakes is in Drope and Webb townships, 30 kilometres northeast of Dryden, Ontario.
The increased Mavis Lake Project Area.
Pegmatites identified
Historical exploration completed by Power Metals at Gullwing-Tot identified multiple spodumene-bearing pegmatites over the project area, with rock-chip samples returning grades up to 6.78% Li2O.
This work centred on two outcropping pegmatites - Gullwing Lake and Tot Lake – with historical exploration also revealing high-grade results for tantalum and caesium.
With its location, Gullwing-Tot Lakes, like Mavis Lake, has excellent and immediate access to national-level road and rail infrastructure, hydropower and support services from the town of Dryden.
Agreement terms
The Purchase and Sale Agreement executed between Critical and Power Metals on December 16, 2022, is binding on both parties. It was subject to completion of due diligence requirements to the satisfaction of the company.
With this now completed to the satisfaction of Critical, the company will now administer the cash and share payment requirements to acquire a 100% interest in the mining claims, being:
- A cash payment of C$600,000 (~A$656,000) made to Power Metals (or nominee); and
- Issue of C$600,000 (~A$656,000) of deemed value in the company’s securities to Power Metals (or nominee).
Critical will also grant Power Metals a 1% Gross Margin Royalty for mineral production within the mining claims acquired by the company.
Future work
The company anticipates that exploration efforts will get underway in the Canadian summer, focused principally on mapping and geochemical field work to develop and refine future drilling targets.
These initial efforts will centre on the Gullwing and Tot Lakes pegmatites.
Critical will leverage its existing exploration team and contractors supporting Mavis Lake in order to complete efforts at the Gullwing-Tot Lakes property.