Mila Resources PLC (LSE: MILA) alongside its partners, has given Liontown, a major Australian-listed company, an option to probe for lithium on their Katleen Valley licence in Western Australia.
Liontown, which has an upcoming lithium project next to Kathleen Valley and supply contracts with LG, Ford and Tesla, recently declined a A$5.5bn offer from Albemarle. Under the proposed deal, Liontown will finance all lithium exploration operations, mining expenses and associated heritage surveys in exchange for an option to secure the right to mine lithium.
The ownership of gold and other minerals within the licence area will be retained by Mila and its partners Trans Pacific Energy (TPE) and New Generation Minerals (NGM).
As per the deal terms, Liontown can opt to purchase up to 80% of the lithium rights from Mila and TPE for a total amount of up to A$2.2mln.
In agreement with TPE and NGM, Mila presently holds a 50% stake in the lithium rights, which would represent 10% of the lithium rights if Liontown fully exercises its option.
“This is a highly exciting development which adds a new and potentially valuable dimension to the Kathleen Valley Project,” commented Mark Stephenson, Mila’s CEO. He continued, “Through this agreement with Liontown, we will see lithium exploration commence in this area of the licence, which hasn’t been explored yet while being shielded from costs.
This lithium deposit has shown to have international strategic significance, most recently highlighted by Albemarle Corporation’s proposed A$5.5bn bid for Liontown. Albemarle is one of the world’s largest lithium producers.”
