Aterian has a joint venture agreement and operating agreement in place with HCK Mining, a private Rwandan entity, over a 2,750-ha exploration licence in southern Rwanda, located around 65km southwest of Kigali and 20km northwest of Huye
Aterian, Rio Tinto partner for Rwandan lithium project. (Credit: CHUTTERSNAP on Unsplash)
UK-based mining company Aterian has signed a joint venture and earn-in agreement with Rio Tinto and Kinunga Mining to explore and develop lithium and by-products in Rwanda.
Aterian has a joint venture agreement and operating agreement in place with HCK Mining, a private Rwandan entity, over a 2,750-ha exploration licence in southern Rwanda.
Under the terms of the agreement, Rio Tinto can earn an initial 51% interest in the HCK licence by spending $3m over a period of two years, as the first stage of the project.
Upon earning a 51% interest, Rio Tinto can earn an additional 24% interest in the licence by funding an additional $4.5m over a period of three-year, the second stage of development.
After completion of Stage-2, Rio Tinto can hold a 75% interest in the licence, by contributing the additional funding.
In addition, Rio Tinto has agreed to pay a 2% NSR over the project, with a $50.0m cap, subject to future joint venture between Rio and Kinunga, and completion of satisfactory due diligence.
The agreement also provides Rio Tinto with an exclusivity option to invest in Aterian’s two other existing Rwandan projects, under separate agreements.
Aterian chairman Charles Bray said: “This is a transformative deal for Aterian and highlights our ability to identify potential world-class deposits in critical minerals such as lithium.
“We have identified 19 separate LCT (lithium-caesium-tantalum) pegmatite zones across the 2,750-hectare project offering the prospective scale necessary to attract such a major partner as Rio Tinto.
“I am very proud of the Aterian team and their work to identify and unlock strategic mineral assets in Africa and to make this transaction possible.”
Aterian may receive a total of $300,000 in cash payments as reimbursement for the previous operational expenses incurred by the UK mining company.
Rio Tinto will make an initial payment of $200,000 upon completing satisfactory due diligence, and an additional $100,000 payment at the beginning of the second stage.
Aterian owns a 70% interest in Kinunga Mining, which holds the licence for the project, while HCK Mining holds the remaining 30% interest.
The licence area is located around 65km southwest of Kigali and 20km northwest of Huye, within the Southern Province, connecting the Nyanza and Huye District boundaries.
Aterian has identified 19 separate lithium/caesium/tantalum pegmatite zones across the 2,750-ha project, which is well connected to local infrastructure.
Bray added: “I am also grateful for the support from our partner, HCK Mining Company Limited and for the continued partnership with the Rwanda Mines, Petroleum and Gas Board who have been crucial to completing the transaction.
“The agreement with Rio delivers material value to Aterian shareholders endorsing Aterian’s capital-efficient business model as well as demonstrating the potential of Rwanda as a mining jurisdiction.
“The agreement is subject to conditions, including the addition of lithium as an exploration commodity on the licence, which is expected in due course.”