ASX-listed mining company Adelong Gold has entered an agreement to acquire three applications for lithium exploration permits in "Lithium Valley", Minas Gerais, Brazil, with Brazilian resident Rafael Mottin.
It is said to help the company own "strategic" land in a region with lithium spodumene deposits.
These three tenements cover a total area of around 5,317.15ha or 53.17km². Through the acquisition, Adelong Gold has secured mineral rights to applications registered under the mineral processes of the Brazilian National Mining Agency (ANM).
The company claims that the tenements show strong potential to host lithium-bearing pegmatites, as they cover Ribeirão da Folha formation, which is part of Neoproterozoic Araçuaí orogeny and are also close to fertile granite intrusives of the Salinas Formation.
Companies including Sigma Lithium, Latin Resources and Lithium Ionic have also discovered major tenements in the province.
The company has agreed to pay A$100,000 ($64,521) as initial payment along with issuing 20 million shares within five days from the date of closing to the seller. Another 20 million shares will be issued within two years of the acquisition completion date.
The seller is also entitled to receive a deferred payment of a further A$100,000 ($64,521) if six rock samples yield more than 1% of lithium oxide (Li₂O) from at least two tenements within 12 months from the acquisition.
Besides, the seller will receive an additional A$150,000 ($96,195.2), if within five years of acquisition, exploration achieves continuous drill intercept of not less than 10m intersection with grades more than 1% of Li₂O.
A further A$150,000 ($96,195.2) will also be paid to the seller if, within five years, at least six million tonnes with more than 1% of Li₂O resources are discovered at the project.
Additionally, a 2% net smelter return royalty will be paid to the seller. Adelong can buy back half of the royalty by paying A$500,000 ($320,651).
“Brazil is emerging as a major global lithium-producing region and we are delighted to acquire three exploration permits in this sought-after lithium jurisdiction," said Peter Mitchell, managing director of Adelong Gold.
“The acquisition positions Adelong Gold to deliver shareholder value via our planned targeted exploration programmes, and to also participate in the region’s development, and seek another future exploration opportunity.
“This represents the company’s first foray into Brazil and is part of our strategy to diversify our project base and to be an active participant in the massive battery metals space.”
