Usha Resources Ltd (TSX-V:USHA, OTCQB:USHAF) announced it has granted Stardust Power the right to earn up to a 90% interest in Usha’s Jackpot Lake lithium brine project in Nevada.
The agreement, pending definitive contracts, could see total consideration of up to $26.03 million over five years, according to a statement from Usha.
This includes $1.53 million in cash, $750,000 in stock, up to $15.75 million in stock or cash at Stardust Power's discretion, and an $8 million work commitment.
Usha would retain a 10% interest in the project and a 2% NSR, carried in the joint venture until a mining decision is made post-feasibility study. Stardust has the option to buy back 1% NSR for $7.5 million.
Stardust Power has already paid Usha a non-refundable $75,000 under the LOI, which includes an exclusivity period through September 2024.
Stardust Power is developing a lithium refinery in Muskogee, Oklahoma, expected to produce up to 50,000 tons annually of battery-grade lithium carbonate. Stardust Power plans to secure feedstock from various producers, positioning the refinery among the largest in the US.
Stardust Power is also set to go public on NASDAQ under the ticker "SDST" through a merger with Global Partner Acquisition Corp II (NASDAQ:GPAC), a special purpose acquisition company. This transaction is anticipated to conclude in the first half of 2024.
Deepak Varshney, CEO of Usha Resources, remarked: "The development of the Jackpot Lake lithium brine project is a key focus of our company. We demonstrated in 2023 that there was significant potential at this project, and we look forward to returning to the project this year to build on last year's successes."
Varshney also highlighted Usha’s strategy of acquiring and monetizing undervalued assets, hinting at potential acquisitions of advanced-stage copper and gold projects to enhance shareholder value.
The Jackpot Lake lithium brine project, located 35 km northeast of Las Vegas in Clark County, Nevada, spans 8,714 acres. Its geologic setting is akin to Albemarle’s Silver Peak Nevada Lithium Mine, North America's sole lithium-producing mine.
Usha’s target area, predominantly above 600 meters depth, covers 2,800 acres and is open for expansion, indicating substantial lithium brine concentration potential.