Tantalex Lithium Resources (CSE:TTX, OTC:TTLXF) shares rallied on Monday after it told investors it has struck a marketing offtake agreement with mining and mineral trading giant Glencore International for lithium produced from its Manono tailings project in the Democratic Republic of Congo.
Under the term sheet dated September 8, 2023, Tantalex said Glencore will provide $5 million under a convertible financing facility and will finance a third of the capital requirements for the tailings project.
The company's shares were up 15% at C$0.12 by midday in Toronto.
Tantalex noted that the first tranche of $2 million will be paid upon execution of the offtake agreement, with $3 million payable upon the satisfactory review of the preliminary economic assessment of the project. If certain conditions are met, including due diligence, the Capex payment will follow.
“Glencore already has very well-established mining operations in the DRC with important cobalt and copper assets,” commented Tantalex Lithium CEO Eric Allard.
“Their experience and expertise in the country will be crucial for developing further our activities in the DRC. The CAPEX financing commitment is a significant milestone in the de-risking of the project and achieving our goal to become the first lithium producer in the DRC.”
The company noted that a maiden mineral resource for the project included 5,46 million tonnes at 0,72% LiO in the Measured and Indicated category, 6,63 million tonnes in total Inferred Mineral Resources at a grade of 0,49% LiO. The estimate also revealed lithium contained in spodumene and amenable for the production of 6% LiO Spodumene Concentrate (SC6).
~ updated with share price movement ~
Contact the author at stephen.gunnion@proactiveinvestors.com