Jindalee Lithium Ltd (ASX:JLL, OTCQX:JNDAF) has congratulated its spin-off Dynamic Metals Ltd (ASX:DYM) on this week signing a binding joint venture and farm-in agreement with Mineral Resources Ltd (ASX:MIN) (MinRes) valued at A$20 million.
The agreement covers Dynamic’s Widgiemooltha Project, which is within close proximity to MinRes’s lithium operations in Western Australia.
It will see MinRes pay Dynamic Metals $5 million in cash and spend $15 million on exploration over four years to earn 65% of the lithium rights at Widgiemooltha. MinRes can increase this to 80% by sole funding until a Decision to Mine.
Jindalee spin-out
Dynamic was spun out of Jindalee in January 2023 with Jindalee shareholders receiving a priority offer to subscribe for Dynamic shares in the IPO. The company remains Dynamic’s largest shareholder with 25.5% of issued capital.
READ: Dynamic Metals soars on landmark $20 million lithium JV with leading producer MinRes
The transaction between Dynamic and MinRes incorporates three stages, subject to the satisfaction of certain conditions:
- Dynamic sells 40% of its lithium rights at the project to MinRes for $5 million cash.
- MinRes can sole fund $15 million of exploration over four years to increase its interest to 65%.
- MinRes can elect to increase its interest to 80% by sole funding expenditure to a Decision to Mine.
“Landmark transaction”
In a statement, Jindalee said: “Jindalee congratulates the Dynamic team on this landmark transaction with MinRes and looks forward to early exploration success at Widgiemooltha, and other projects in Dynamic’s extensive portfolio.”
Importantly, Dynamic will retain rights to all minerals other than lithium over the project and will maintain access to all areas of the project.
The transaction is anticipated to complete in the second quarter of 2024.