Ultra Lithium Inc. (TSX-V:ULI, OTCQB:ULTXF) said it has entered into a definitive agreement with Zangge Mining Investment Co. Ltd for the exploration and development of its 100%-owned Laguna Verde brine lithium project in Argentina’s Catamarca province.
Under the terms of the agreement, Ultra Lithium said Zangge will pay it $10 million in staged payments and invest $40 million in the Laguna Verde project as work expenditures in return for a 65% stake in its Ultra Argentina subsidiary, which holds the Laguna Verde property.
The company noted that Zangge Mining Investment is a wholly-owned subsidiary of Zangge Mining Co, Ltd, a lithium and potassium producer listed on the Shenzhen Stock Exchange with a market capitalization of about $8 billion.
READ: Ultra Lithium reports encouraging progress at its Laguna Verde lithium brine project in Argentina
Since as early as 2007, it said the core technical team of Zangge has been engaged in the technology research and development and industrialized construction for brine lithium extraction and has positioned itself as an adsorption lithium extraction technology leader in the global lithium industry.
Ultra Lithium said Laguna Verde is a new brine lithium discovery where exploratory sampling conducted by the company has shown lithium values in the range of 34.2 to 1,270 milligrams per litre (mg/L) or parts per million (ppm), magnesium values less than 1 to 7,920 ppm, potassium 804 to 15,800 ppm, and boron 65 to 2,190 ppm.
The Laguna Verde area is marked by low magnesium to lithium ratios, in the range of zero to 10.2. In 2018, Ultra Lithium said it completed a 39.2-line-kilometers of a ground geophysical survey which indicates high-value brine lithium exploration targets in a salar core area of 3.4 square kilometers within a potential brine basin of twenty-three square kilometers and a thickness of 100 to 150 meters.
Gravity survey interpretation shows a major fault system exists to the east of the Laguna Verde Salar representing a 2.4-kilometre-thick Cenozoic basin, which requires further research.
Ultra Lithium said it is currently carrying out exploratory drilling on the Laguna Verde property where the first drill hole indicates the presence of a continuous brine aquifer comprising mainly of clastic sediments from 13.9 meters to 205 meters drilled depth with a marked hydrothermal presence towards the deeper section. The aquifer is still open at depth.
The company noted the investment is subject to regulatory approvals and due diligence.
Vancouver-based Ultra Lithium holds a brine lithium property in Argentina, hard rock spodumene type lithium properties in northwestern Ontario, and a brine lithium property in the Big Smoky Valley, Nevada. The company also holds other gold and base metals properties in Argentina.
Contact the author at stephen.gunnion@proactiveinvestors.com