Rapid Lithium, previously known as Armada Metals, has entered into a binding term sheet to acquire the entire issued capital of New Energy.

This agreement establishes the framework and key terms under which Rapid Lithium and Patriot Lithium will work towards formal long-form agreements to implement the proposed transaction.

New Energy owns 100% of the Black Hills Project, which comprises the Keystone and Tinton West projects.

The Keystone Project is situated near the town of Keystone, a small community in the central-eastern part of the Black Hills, roughly 26km southwest of Rapid City.

Under the terms of the agreement, Rapid Lithium will issue 59.36 million ordinary shares to Patriot Lithium, with the shares subject to voluntary escrow for 12 months from the issue date.

Rapid Lithium confirmed that this transaction complements its recent acquisition of Midwest Lithium and supports its strategic focus on exploring hard-rock lithium assets in the US.

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The completion of the transaction is subject to Rapid Lithium successfully conducting legal, financial, tax and technical due diligence, as well as securing all required regulatory and third-party approvals.

Both companies will further negotiate and execute formal long-form agreements to comprehensively document the terms of the proposed transaction.

Rapid Lithium managing director Martin Holland said: “This acquisition positions the company as one of the leading strategic landholders in South Dakota, US, and sits adjacent to some of the company’s newly acquired assets.

“Following the recent presidential victory announcement, the company anticipates that holding strategic lithium assets within the US will be increasingly valuable. I am eager to explore these extensive hard rock lithium pegmatites.”

Both companies will further negotiate and execute formal long-form agreements to comprehensively document the terms of the proposed transaction.

Patriot chairman Hugh Warner said: “This transaction offers Patriot shareholders a chance to participate in the rollup of lithium acreage in the Black Hills.

“It has been our stated intention to participate in such a plan and after considering the corporate candidates to lead such an aggregation play, we determined that Rapid Lithium, led by Martin Holland, is best placed.”