Pantoro Ltd (ASX:PNR) has entered a binding term sheet for a lithium development partnership with Mineral Resources Ltd (ASX:MIN), alongside 50% Norseman Gold Project joint venture (JV) partner Tulla Resources Plc (ASX:TUL), to explore and develop lithium deposits across the Norseman Gold Project tenure in Western Australia.
As part of the deal, Mineral Resources will front exploration costs on Norseman's Buldania lithium tenements and can earn up to 65% of the project's lithium rights if it funds the project up until first production.
Mineral Resources is a leader in the construction and operation of hard rock lithium mines in Western Australia, and brings technical, operational and financial experience to the Norseman joint venture and the Pantoro-Tulla team.
Unter the binding term sheet, the lithium miner will manage the JV, with drilling to commence as soon as possible.
“Outstanding outcome for Pantoro”
“This new partnership is an outstanding outcome for Pantoro to maximise the value of a key mineral asset at Norseman,” said Pantoro managing director, Paul Cmrlec.
“The agreement allows us to progress without any distraction from our core business of gold development and mining while maximising value for our shareholders.
“Mineral Resources is a development- and production-focused company with an excellent track record and reputation.
“Pantoro has every confidence that Mineral Resources will ensure the successful development of the lithium assets. We look forward to rapidly generating drilling results from the highly prospective Buldania tenements.”
The Buldania lithium tenements lie immediately along strike from Liontown Resources (ASX:LTR) Anna Lithium deposit, which holds 14.9 million tonnes at 0.97% lithium equivalent and 44 parts per million (ppm) tantalum pentoxide.
Rock chip samples taken by Pantoro from outcropping spodumene-bearing pegmatites immediately along strike of the Anna deposit include:
- 3.96% lithium oxide, 12ppm tantalum pentoxide;
- 2.52% lithium oxide, 33ppm tantalum pentoxide;
- 2.24% lithium oxide, 240ppm tantalum pentoxide; and
- 0.96% lithium oxide, 217ppm tantalum pentoxide.
Key terms of the JV
As part of the binding term sheet, Pantoro, Tulla and Mineral Resources have agreed:
- Mineral Resources will complete a minimum of $500,000 expenditure within six months;
- Mineral Resources will spend a further $2.5 million within 18 months;
- Mineral Resources will complete a feasibility study, which includes the definition of a JORC-compliant resource within 24 months, to earn 25% of the Norseman's lithium rights (known as the initial farm-in interest);
- Mineral Resources can earn a further 40% of the lithium rights (bringing its ownership to 65%) by funding the project until first production;
- Pantoro and Tulla (jointly or independently) have the right to buy back in to increase their ownership in the joint venture to a combined 49.9%; and
- Mineral Resources must make a final investment decision to proceed with construction within three months of earning its initial farm-in interest.
About Pantoro
Pantoro is an Australian gold producer with a 100% interest in the Halls Creek Gold Project in the Kimberley Region of Western Australia and 50% in the Norseman Gold Project in the Goldfields.
The Halls Creek Project, which includes the Nicolsons and Wagtail Mines and a pipeline of exploration and development prospects, has a mineral resource of 393,000 ounces of gold.
Meanwhile, the Norseman Gold Project bears 4.4 million gold ounces, but there's strong potential for increases based on recent exploration in the area.