Lithium Australia NL (ASX:LIT) (OTCMKTS:LMMFF) (FRA:3MW) has entered into an amended and restarted binding farm-in-agreement with Okapi Resources Limited (ASX:OKR) covering the Mount Day tenement in the Lake Johnston area of Western Australia.
The revision allows Okapi to focus on the high-priority gold targets and reduce expenditure commitments.
It includes a new minimum exploration commitment of $100,000 over two years and the ability to earn a 75% interest by undertaking exploration to $800,000 within 48 months.
This greater tenement package was originally identified by Lithium Australia targeting lithium mineralisation.
Farm-out agreement
Earlier this year, LIT has signed a farm-out joint venture agreement with gold-focused Okapi covering the Mount Day and Medcalf tenements at Lake Johnston.
Following the agreement, Lithium ustralia retains the lithium rights and also retains 25% interest in any gold and nickel discoveries on the tenements.
The E63/1903 tenement subject to the amended agreement is at the southern end of the Lake Johnston Greenstone Belt in central Western Australia that hosts the Mount Holland Gold Mine of Wesfarmers Ltd (ASX:WES) and the Lake Johnston nickel mines of Poseidon Nickel Ltd (ASX:POS).
Additional tenement
Okapi has also applied for an adjacent tenement (E63/2039), which contains the historical Maggie Hays Hill gold workings, to cover a coincident structural and geochemical defined target.
The anomalous gold in soil zone sits adjacent to the workings but has not been drill tested.
This area has been the focus of nickel and lithium exploration with limited follow-up on the gold potential.
The main target at the Mount Day Project straddles the Okapi tenement application and the farm-in tenement.
In addition to the gold opportunity, the region hosts nickel deposits in the same geological sequence present in the Mount Day Project.
Amended terms
The key terms of the amended agreement are:
- Okapi has the exclusive right to earn a 75% interest in mineral rights, other than lithium, over tenement E63/1903;
- Okapi will undertake a minimum expenditure of $100,000 on tenement E63/1903 within two years from the execution date of the amended agreement;
- Okapi will be entitled to earn a 75% interest in tenement E63/1903 by undertaking exploration expenditure of $800,000 or more on the tenements within 48 months; and
- If Okapi earns the farm-in interest, Okapi must free carry Lithium Australia until completion of a mine plan which is accepted by the department of mines, industry regulation and safety as being in compliance with the Mining Law.
Results from infill soil sampling to follow-up the gold anomaly are expected soon.
Okapi is pursuing a growth strategy that aims to appraise and secure further exploration and development opportunities within gold and mineral endowed districts.