Lithium Australia NL (ASX:LIT) has signed a farm-out joint venture agreement with gold-focused Okapi Resources Ltd (ASX:OKR) covering the company’s Mount Day and Medcalf Tenements at Lake Johnston in Western Australia.
Lithium Australia managing director Adrian Griffin said: "Lithium Australia is striving to add value to its exploration assets and the JV with Okapi is a great step in that direction.”
Following the agreement, Lithium Australia retains the right to mine lithium and also retains 25% interest in any gold and nickel discoveries on the tenements.
Besides this, the company is free carried for all gold and nickel expenditures until the completion of a definitive feasibility study (DFS).
“Best of both worlds”
Griffin added: “The Lake Johnston region has great fundamentals as a gold province but has been overlooked in recent exploration.
“The area also has huge lithium potential as evidenced by outcropping spodumene deposits on our Medcalf prospect.
“The JV with Okapi provides Lithium Australia shareholders with upside for gold and base metal discoveries while retaining 100% of the lithium potential.
“This is the best of both worlds.”
Mount Day and Medcalf Tenements
Okapi will earn into seven of Lithium Australia's granted exploration tenements comprising an area of 450 square kilometres
The tenements are at the southern end of the Lake Johnston Greenstone Belt that hosts the Mount Holland Gold Mine and Lake Johnston nickel mines in central Western Australia
- Okapi will pay Lithium Australia a $20,000 deposit to secure the option and has 10 business days from the date of the agreement to complete legal due diligence.
- Okapi has 30 days from the date of the agreement to complete the technical due diligence. Upon satisfaction of the legal and technical due diligence, Okapi may exercise the option to proceed with the farm-in.
- Okapi will undertake a minimum expenditure of $150,000 on the tenements.
- By undertaking exploration expenditure of not less than $1.2 million on the tenements within 60 months of the date that the option is exercised Okapi will be entitled to earn a 75% interest in the tenements.
- If Okapi acquires the farm-in Interest, it must free carry the company until completion of a DFS.