Canadian firms ink multiple deals on lithium projects

The past few days have seen a flurry of activity in the lithium space, with four Canadian and Australian firms announcing acquisitions and earn ins.

Li3 Lithium (TSXV: LILI) announced Wednesday that its 50%-owned Li3 Resources has earned a 50% interest in the Mutare lithium project in eastern Zimbabwe through its US$250,000 funding of initial exploration at the site.

Li3 Resources has until Dec. 31 to close the spend and exercise its option to acquire the 50% stake in Mutare, a 15-sq.-km plot of licences inside the Mutare Greenstone Belt. The area is believed to be prospective for lithium-cesium-tantalum pegmatites based on previous exploration and potentially comparable to the Pilbara Craton pegmatites in Western Australia.

The exploration program under the spend includes surface rock-soil sampling and a geochemical survey to help identify priority areas for the 5,000-metre exploration drilling program. Drilling, with the goal of completing an initial mineral resource, is expected to start in the first quarter of 2023, Li3 said in a news release.

The earn-in comes as lithium activity in the southern African country accelerates, with Chengxin Lithium Group and Sinomine Resource Group both forming a joint venture to explore for the metal there, and Zhejiang Huayou Cobalt announcing plans to invest US$300 million to develop its Arcadia lithium mine, Bloomberg reported on Tuesday.

Also on Wednesday, Lithium One Metals (TSXV: LONE) announced it had entered option agreements to acquire six lithium properties in northwestern Ontario, adding 232.5 sq. km across 1,124 claims to the company’s portfolio of assets in Ontario and Quebec.

The assets, all located in the Red Lake and Thunder Bay mining divisions, include the Root South, Parks, Allison South, Sharp, Dagny and Adamhay lithium properties.  Root South is located just beside Green Technology Metals (ASX: GT1)’ Root project, where the Australian company recently announced a 24,000-metre drill program on its 2 million tonne lMt McCombe lithium deposit averaging 1.3% lithium oxide. Parks is situated within the Barbara Lake pegmatite field (just east of Rock Tech Lithium (TSXV:RCK)’s Georgia Lake project; and Allison South sits on the edge of the Allison Lake Batholith.

The Vancouver-headquartered Lithium One plans to start an exploration program on the sites in the spring of 2023, focusing on prospecting, mapping, and sampling of pegmatites.

Acquiring 100% interest in the properties is subject to the company paying between $26,500 and $220,000, and issuing between 182,000 and 1.5 million common shares over a two or three-year period.

On Tuesday, Australia’s Arizona Lithium (ASX: AZL; US-OTC: AZLAF) announced a definitive agreement to acquire 100% of privately held Prairie Lithium Corp. in a cash and share deal valued at $70.6 million.

Under the proposed transaction, which is subject to key conditions including shareholder and regulatory approvals, Arizona would pay $40 million in cash and grant Prairie shareholders 500 million Arizona shares at a price of 6¢ per share, based on the 10-day volume-weighted average price Arizona’s share.

Regina-based Prairie Lithium owns a lithium project in the resource-rich Williston Basin of Saskatchewan, and has since 2020 been using proprietary technology to extract brines from underground wells.

Its processing facility, located in Emerald Park just east of Regina has extracted lithium from brines at 99.7% in a “matter of minutes”, the company has said.  

Arizona Metals, based in Perth, is focused on the development of its flagship Big Sandy lithium project in the U.S. state of Arizona.

And in a second major announcement on Tuesday, Critical Metals Corp., a proposed new entity in the process of formation said it had signed a binding long term offtake agreement through its Australian subsidiary ECM Lithium with BMW for about 50,000 tonnes of battery grade lithium hydroxide sourced from the Wolfsberg lithium project in southern Austria. The carmaker also has been given the first right to purchase 100% of the lithium hydroxide produced from Wolfsberg.

In the first year of the agreement, 5,000 tonnes will be supplied, rising to 9,000 tonnes each subsequent year for six years from 2026. There is an option for a three-year extension. Pricing will be based on fast market spot prices with a discount applied, Critical Metals stated in a news release.
BMW will make an advance payment of US$15 million to ECM Lithium that will be repaid by equal set offs against lithium hydroxide to BMW.  

Critical Metals’ executive chairman, Tony Sage said in a news release that the deal with BMW secures the company’s first offtake agreement.

“We look forward to partnering with BMW in the future,” he said.

In October, European Lithium (ASX: EUR) and Sizzle Acquisition (NASDAQ: SZZL) announced a business combination, which would upon closing make Critical Metals the owner of the Wolfsberg project, the companies said in a news release. The entity is expected to become a “leading lithium mining company.” Critical Metals intends to be listed on Nasdaq under the ticker “CRML” in the first half of 2023.