Ragusa Minerals has signed a farm-in agreement with May Drilling to obtain a 90% interest in five prospective tenements, located in Litchfield Pegmatite Belt, Northern Territory, Australia.

Under the terms of the deal, the company will initially acquire 90% stake in tenements EL28642, EL29731, EL30521, EL32671 and EL(A)32405, with an option to acquire the remaining 10%.

Ragusa will pay A$125,000 ($88,854) in cash to May Drilling to conduct due diligence works on the newly acquired tenements for a period of up to 12 months.

The works include exploration activities covering around 570km2 of area, that target outcropping pegmatite rocks, which were identified from the historical exploration activities.

In addition, Ragusa will hold the right to purchase May Drilling’s remaining 10% stake in the tenements for A$500,000, and grant a 2% net smelter royalty.

May Drilling retains the rights to explore any alluvials on the tenements.

Ragusa chairperson Jerko Zuvela said: “The Company has secured extremely strategic and highly sought- after lithium prospective tenements in the centre of a well-renowned lithium district.

“This is a significant opportunity to combine Ragusa’s existing NT lithium projects to create a combined “supergroup” project area comparable to neighbours Core Lithium and Lithium Plus, and utilise our exploration and development experience to rapidly progress our NT Lithium Project in a Tier 1 jurisdiction close to major infrastructure.

“With four currently granted tenements and considerable historic works to reference, Ragusa is in a strong position to rapidly accelerate the development of our project at a time of record lithium prices and within a proven high-quality lithium district.”

May Drilling and others have previously conducted exploration at the tenements, which focussed on tin, tantalum, gold, copper, graphite, lead, zinc, uranium and lithium.

A series of geochemical studies, drilling, surface rock-chip analysis and geophysical survey data on the tenements, all showed anomalous results.

Ragusa intends continue the previous work that identified high grade lithium and gold mineralisation in preliminary surface exploration works.

Upon completion of the farm-in period, the two companies will sign a joint venture agreement.