China-based Yahua is expected to acquire a stake of nearly 10% in Jadar Resources at $0.032 per share
Jadar Resources and Yahua International Investment and Development are joining forces to acquire and develop lithium projects.
The partnership has also been initiated for the global supply of spodumene concentrates.
In this connection, the parties have signed a non-binding memorandum of understanding (MoU) that outlines the terms needed to be negotiated for inclusion in the partnership agreement.
Based in Australia, Jadar Resources is engaged in exploring mineral deposits. It has a particular focus on high grade lithium resources in Serbia and Austria.
Yahua is a China-based lithium hydroxide and lithium carbonate producer owned by the Sichuan Yahua Industrial Group.
As part of the agreement to be signed within six months of the MoU, Yahua could acquire a stake of around 10% in Jadar Resources at A$0.045 ($0.032) per share.
If the deal takes place, then the Australian firm is expected to use the proceeds only on exploration and development of its lithium projects.
Currently, it is engaged in the Shaw River lithium, tin and tantalum project in Australia and the Weinebene and Eastern Alps lithium project in Austria. In both the projects, Jadar Resources has a stake of 80%.
Jadar Resources executive director Adrian Paul said: “I am extremely excited to progress this MOU and strategic partnership with Yahua. The EV and lithium markets have seen substantial growth over the past year as global adoption of EV technologies starts to materialise.
“The MOU provides a potential mechanism for both the development of our current lithium assets as well as an avenue for further growth in the portfolio through acquisition.”
The MOU also calls for the creation of a joint venture to acquire and develop lithium projects.
The Australian company has to sell all the lithium concentrate produced by it to Yahua. Besides, it will be responsible for obtaining all the governmental and local mining approvals and licenses needed for operations.
In a separate development, Jadar Resources has changed its name to EV Resources.