Arrow Minerals Ltd (ASX:AMD) has partnered with Electrostate Pty Ltd to advance its Malinda Lithium Project in Western Australia under an earn-in agreement.
Ultimately, the binding term sheet allows the private company to earn up to 85% of Arrow's WA lithium play over time.
Under the deal, Electrostate can explore over three key tenements during an 18-month period while Arrow remains focused on its priority gold and base metal portfolio.
To kick off the agreement, Electrostate will pay $60,000 to Arrow as an initial consideration.
“Significant upside” for both parties
Arrow Minerals chief executive officer Howard Golden said: “This agreement has significant upside for Arrow, as well as our earn-in partner Electrostate.
“This allows the highly prospective Malinda project to be rapidly advanced while allowing Arrow to focus on its high priority base and precious metals projects in Burkina Faso and Western Australia.
“The exposure to a successful outcome in the lithium space puts Arrow in a position to quickly benefit from the rapidly expanding energy minerals market.
“We look forward to continuing our successful exploration efforts in Africa and Australia and anticipate that the Malinda project will move forward rapidly to a mutually beneficial result.”
Agreement details
Under the binding term sheet, Electrostate has agreed to a number of considerations to earn the right to acquire an 85% stake in the Malinda asset.
In addition to the $60,000 down payment, the private company will issue Arrow 5% of the fully paid, ordinary shares in its share capital once it goes public.
Electrostate will also earn a 75% interest in the three exploration tenements by sole funding $1 million over 18 months.
The earn-in partner can increase that stake to 85% with a further $290,000 investment.
As it explores at Malinda, Electrostate will sole-fund all activities through to a pre-feasibility study.
After this stage, an Arrow-Electrostate joint venture will operate the project based on their respective ownership percentages.
Arrow may then fund proportionally, dilute, or convert to a 1% net smelter royalty.
Malinda Lithium Project
Arrows agreement with Electrostate covers three exploration tenements in northwest WA that comprise the Malinda lithium asset.
These tenements sit within a southeast-trending belt in the Gascoyne Province of the Capricorn Orogen.
Promisingly, this area is well endowed with pegmatite-associated minerals, with historical workings recording the presence of highly anomalous lithium and tantalum.
Arrow has already completed geochemical, geophysical, hyperspectral and drilling work on the tenements.
Historically, this activity uncovered:
- 23 metres at 0.98% lithium oxide;
- 2 metres at 1.71% lithium oxide; and
- 11 metres at 323 parts per million tantalum pentoxide.