Riversgold Ltd (ASX:RGL) has signed a binding agreement granting it an option to acquire an 80% interest in the lithium rights over land immediately adjacent to the globally significant Mt Holland lithium mine in the Yilgarn Craton of WA.
The 9.2-square-kilometre granted exploration lease, immediately to the east of Covalent Lithium’s Mt Holland lithium mine is highly prospective for lithium in spodumene rich pegmatites.
Notably, the acquisition adds to RGL’s 292-square-kilometre package of highly prospective lithium ground in the Southern Cross-Marvel Loch district.
Furthermore, this newly granted tenement is situated about 500 metres to the east of a string of historical drillholes which demonstrated extensive lithium mineralisation.
The markets welcomed the news with shares trading as high as $0.051, up 45.7% from previous close.
“Great potential”
Riversgold CEO Julian Ford said: “This is a tremendously exciting deal for RGL.
“The new ground directly abuts Covalent Lithium’s Mt Holland Project, where they are actively developing their Earl Grey deposit which contains a resource of 189 million tonnes at 1.5% lithium oxide (Li2O).
“We believe there is great potential for the Earl Grey and Bounty systems to continue into the E77/2784 tenement.”
Prospective location and geology
The tenement sits on the eastern contact between the Southern Cross/Forrestania Greenstone Belt and intrusive granitoid units and straddles a later Proterozoic dyke intrusion which runs west to east and is a feature of the Mt Holland mine’s stratigraphy.
The Mt Holland pegmatite field and the Earl Grey mineral resource are located within the Archaean Forrestania Greenstone Belt, which is part of the Archaean Yilgarn Craton of Western Australia.
The Forrestania Greenstone belt hosts several gold, nickel and lithium deposits. The historical Bounty gold mine produced 1.2 million ounces of gold between 1989 and 2001.
Acquisition terms
The key terms for the acquisition of the lithium rights by RGL MVL Pty Ltd, a wholly owned subsidiary of the company, from the vendor, Cacique Resources Pty Ltd, an unrelated party, are as follows:
- for an option period of one year, which may be extended in the event RGL is prevented from conducting activities on the tenement for various reasons;
- Cacique will receive a total of A$150,000 in cash, of which A$20,000 has been paid as a deposit and A$130,000 is payable within five business days, and 4,054,054 RGL shares shall be issued within two business days;
- during the option period, RGL will be responsible for maintaining the tenement in good standing and pay the tenement outgoings;
- RGL will have the option, during or prior to the end of the option period, to pay Cacique A$700,000 in cash to earn an 80% interest in the lithium rights on the tenement;
- the lithium rights extend to include tantalum, tin, caesium and scandium. In the event that the option is not exercised, the agreement will terminate; and
- Cacique will be free carried to production on its 20% lithium interest.