Bradda Head Lithium Ltd (AIM:BHL, OTC:BHLIF, TSX-V:BHLI, FRA:8CD1) shares were on the front foot on Tuesday, after it signed a binding “option to joint venture” agreement with Kennecott Exploration Inc, part of Rio Tinto, covering the Whistlejacket lithium-bearing pegmatite property in Arizona.
The AIM-listed company said the agreement allows it to earn up to a 60% legal and beneficial interest in phases, starting with an option to earn 51% in Phase 1 and a further 9% in Phase 2 at Bradda Head’s discretion.
The company noted that Whistlejacket comprises 9 Arizona State Lands Department mineral exploration permits totalling 4,486.07 acres and that Kennecott drilled 19 holes for 4,188 meters of core, with assay results including 41 meters at 1.22% Li2O in hole WSTL0009 and 19.47 meters at 1.65% Li2O in hole WSTL0008.
“Subject to approval by shareholders at the forthcoming general meeting, the Whistlejacket Project will be a fabulous acquisition for the company which we are excited to add to our lithium portfolio and plan on commencing exploration as soon as possible," said executive chair Ian Stalker.
He added: “The work conducted to date by KEX is of the highest standard, utilizing Best Management Practices and provides Bradda Head with an exceptional foundation to leverage our strategic and future drill planning.”
Bradda Head said the proposed transaction is conditional on shareholder approval, and it plans to publish a circular and notice of general meeting. It said Phase 1 requires at least US$0.75 million in year one and up to US$5.50 million over three years to earn 51%, while Phase 2 would require a further US$12 million over three additional years to reach 60%, and it has agreed convertible loan facilities of US$1.28 million from Galloway and Promaco to support near-term commitments.
In London, the small cap share was up around 4%, changing hands at 1.77p.