As per the terms of the deal, an IGO subsidiary can gradually acquire up to a 70% stake in the Australian project by spending $4.16m of exploration expenditure
Venus Metals (VMC) has signed a binding agreement with a subsidiary of IGO under which the latter will become its joint venture (JV) partner in the Bridgetown Greenbushes exploration project in Western Australia.
The Bridgetown Greenbushes exploration project comprises the Greenbushes east lithium and Bridgetown east Ni‐Cu‐PGE assets. Put together, these include four granted tenements along with two exploration applications of a subsidiary of Venus Metals.
As per the terms of the deal, the IGO subsidiary can gradually acquire up to a 70% stake in the Bridgetown Greenbushes exploration project by spending A$6m ($4.16m) on exploration expenditure.
IGO has a stake of 49% in a joint venture called Tianqi Lithium Energy Australia with Tianqi Lithium. The joint venture, in turn, has a 51% stake in the Greenbushes lithium mine in Western Australia.
The Bridgetown Greenbushes exploration project is located in close proximity to the Greenbushes lithium mine.
Venus Metals managing director Matthew Hogan said: “We are delighted to welcome IGO Limited as a substantial shareholder of the Company.
“IGO Limited’s knowledge and technical expertise regarding LCT pegmatites and Ni-Cu-PGE Sulphide exploration, and development is invaluable for the highly prospective tenement package held by VMC at Bridgetown-Greenbushes next to the World’s lowest cost and highest grade hard rock lithium mine.”
The IGO subsidiary involved in the deal will fund 100% of all the JV expenditure until the completion of a pre-feasibility study of the Bridgetown Greenbushes exploration project.
After completing a pre-feasibility study, the IGO subsidiary will be entitled to acquire a 30% stake in the exploration project for a price based on fair market value.
In case, the IGO subsidiary does not elect to acquire the 30% stake, then the parties will continue to work in an unincorporated JV under which the former should use reasonable endeavours to market and process all product from the project, as per the terms of the deal.
In connection with the farm-in and JV, IGO has also agreed to subscribe to nine million fully paid ordinary shares in Venus Metals at an issue price of A$0.23 ($0.16) per share. The latter has raised A$2.07m ($1.44) through the share placement.