The acquisition will diversify Argosy’s global footprint and provide an opportunity to utilise our lithium production experience to potentially develop TLP
Image: Location of the Tonopah Lithium Project. Photo: Courtesy of Argosy Minerals Limited.
Argosy Minerals Limited (“Argosy” or “Company”) is pleased to advise it has executed a Sale Agreement with LCME Holdings Inc. (a subsidiary of Lithium Consolidated Ltd – ASX:Li3), Big Smokey Exploration LLC , ProspectOre LLC and ProspectOre Inc. (the “Vendors”) for the acquisition of 100% of the tenements comprising the Tonopah Lithium Project (“TLP”), located in Nevada, USA.
Argosy conducted a meticulous identification and selection process to confirm the TLP credentials and development prospectivity, and timed our approach to ensure a very low risk entry-point to provide maximum upside potential.
TLP provides another opportunity to take an early stage lithium project and apply the Argosy strategy – as demonstrated at our Rincon Lithium Project, to similarly advance TLP. Furthermore, the project is located in one of the world’s most favourable and stable mining jurisdictions and home to the USA’s burgeoning electric vehicle industry, and with well-developed infrastructure and a skilled local mining workforce .
Argosy Managing Director, Jerko Zuvela said “Argosy has achieved significant development milestones at Rincon, notably ≥99.5% lithium carbonate production from the industrial scale pilot plant, and we have now selected TLP to further expand our fast-track lithium development strategy.
The acquisition will diversify Argosy’s global footprint and provide an opportunity to utilise our lithium production experience to potentially develop TLP. The USA is fast becoming a powerhouse in the EV industry and its government is taking steps to promote the highly strategic battery minerals industries. TLP will place Argosy in prime position to take advantage of our expertise in an established mining region. We remain committed to our priority Rincon Lithium Project and the near term development of the 2,000 tpa LCE production plant.”
The Company considers the opportunity to acquire a USA based project in a jurisdiction supportive of the commercial development of lithium, and which is listed on the US Government’s 2018 Final List of 35 Minerals Deemed Critical to U.S. National Security and the economy, as a strategic position to further develop Argosy into a world -class lithium producer. Furthermore, last month, the US Department of Commerce reported that “unprecedented action” would be taken to strengthen the USA’s critical mineral supply chains, including via support for domestic resource development.
SALE AGREEMENT SUMMARY TERMS
Argosy has executed a binding Sale Agreement with the Vendors, whereby the Company has agreed to purchase all of the Vendor’s rights, title and interests in TLP, subject to the terms and conditions of those agreements.
The material terms of the Sale Agreement include:
The sale of a 100% interest in TLP, consisting of 425 Claims, in Esmeralda County, Nevada, United States of America.
A non-refundable cash payment upon signing of US$10,000 to the Vendors.
A due diligence period ending on 26 August 2019, and a t which time Argosy can make a purchase election.
Upon making a purchase election, Argosy will pay:
The claims renewal costs, for each of the 425 Claims, by 1 September 2019, comprising:
The Federal Annual Mining Claim Maintenance Fee (approximately US$165 per claim); and
The County Mining Claims Fee (approximately US$12 per claim). Purchase price of US$50,000 to the Vendors.
Upon releasing a Project milestone for a JORC Mineral Reserve of one million tonnes of LCE Product or first commercial production, Argosy will make a milestone payment of A$ 500,000 (in cash or shares, at Argosy’s election) to the Vendors.
OVERVIEW OF TONOPAH LITHIUM PROJECT
The Project has the following key characteristics:
The Project is located within the Big Smokey Valley region in Nevada, USA, and comprises 425 claims covering an area of ~ 34.25km².
The Project is directly analogous to the neighbouring Silver Peak Lithium Mine deposit model, both geologically and structurally.
SRK completed a technical review of the Project and provided positive validation of the lithium brine resource potential.
Geophysical survey data available over the Project area, identifying lithium brine targets areas.
The lithium brine deposit model has the following key geological features:
Closed basin structures, with lithium bearing host rocks in an area of high evaporation;
Basin fill that includes clay, sand and ash horizons that can act as traps and lithium-brine reservoirs;
Expected presence of key stratigraphic marker horizons, including the Bishop Tuff, which is the key lithium brine -hosting horizon at Silver Peak Mine;
Known active and paleo geothermal activity and recent faulting;
Anomalous lithium in the surface sediments and near-surface waters;
Little to no drilling has penetrated the key buried, paleo brine targets; and
The commercial viability of the in- situ lithium mineralisation is established by continuous production at the Silver Peak Mine.
There is considerable data on the geology, hydrology and structural controls on the mineralisation of the Silver Peak Mine, as a result of its long history.
High quality regional and site infrastructure will facilitate project development. The Project is within a 40 minute drive from the regional mining centre of Tonopah, which is located 336km from Las Vegas and 380km from Reno, Nevada.
Argosy will, subject to successful completion of due diligence, initiate works to determine the most effective development strategy for the Project. The Company will secure highly skilled and experienced in-country consultants to assist with advancing the Project.
The Company will continue proactively working to review and consider new projects in the sector to utilise our established lithium experience and expertise to complement our project portfolio.
Source: Company Press Release