Australia-based Eastern Resources has signed a binding agreement with Lithium Australia to acquire the latter’s 70% stake in the Lepidolite Hill lithium project located in Coolgardie, Western Australia.

Located about 32km west of the Mt Marion lithium mine, the Lepidolite Hill project contains prospecting licences 15/5574, 15/5739 and 15/5575, which would later form an application for mining lease 15/1874.

Under the terms of the agreement, Lithium Australia will receive a consideration of A$550,000 ($373,114.5) in cash from Eastern Resource.

The total consideration will be paid in three tranches of which A$50,000 ($33,919.5) is expected within 10 business days from the execution of the agreement and A$100,000 ($67,839) will be paid on the completion of the agreement.

The remaining A$400,000 ($271,356) will be paid within 10 business days from the date that the license 15/1874 is granted and transferred to Eastern Resources.

Following the completion of the agreement, both firms will form a joint venture (JV) for exploration and evaluation and, if permitted, development and exploitation of all minerals within the tenements of the lithium project.

Eastern Resources is expected to become the initial manager of the JV with a 70% stake and the remaining 30% interest is held by Lithium Australia.

Once the JV is formed, Lithium Australia’s 30% interest will be free-carried until a definitive feasibility study has been completed for the Lepidolite Hill project.

Besides, both firms will partner for an offtake agreement of not over 30% of the lithium product extracted from the Lepidolite Hill lithium project.

Lithium Australia CEO Simon Linge said: “This divestment of the majority of the Lepidolite Hill Lithium Project further simplifies the company.

“Over the past few months, we have defined the commercialisation and growth pathways to deliver customer-focused solutions for the lithium-ion circular battery materials industry that will accelerate global electrification for our solutions pathways.”