Lithium Australia NL (ASX:LIT) and Tin International AG, a subsidiary of Deutsche Rohstoff AG (ETR:DR0), have entered into a binding memorandum of understanding to form a joint venture.
The partnership will include the key asset of the Sadisdorf deposit, located in Saxony, Germany.
The goal is to extend and upgrade the existing Inferred JORC Resource of: 3.36 million tonnes at 0.44% tin, and to delineate a lithium resource which is anticipated to be associated with the tin mineralisation.
Lithium Australia said that the tin orebody is thought to contain in the order of 15% zinnwaldite.
Zinnwaldite is a lithium mica very easily treated with the Sileach™ process.
Lithium Australia is a dedicated developer of disruptive lithium extraction technologies, and is the 100% owner of the Sileach™ and LieNa™ processes.
Adrian Griffin, managing director for Lithium Australia, commented:
"Sadisdorf has mine openings, historic tin production and a well identified lithium halo through and around the JORC Resource.
"This is a great opportunity to establish a substantial lithium resource to feed a Sileach™ processing facility in Europe."
Consideration
Lithium Australia has the right to earn 15% of the to be established company by spending EUR 750,000 on exploration until the end of 2017.
Alternatively the company can elect to pay the outstanding amount in cash to Tin International by year-end.
By investment of a further EUR 1.25 million over a 3-year period Lithium Australia has the right to further increase its interest in the joint venture company to 50%.
After the completion of this “earn-in” period, the partners equally bear the project development costs or are diluted accordingly.
Tin International will receive a one-off payment of EUR 200,000 in LIT shares and EUR 50,000 in cash.