Aurora Energy Metals has entered a term sheet with Macro Metals to sell an 85% stake in lithium rights in the Aurora Energy Metals project in Oregon, US.

According to the agreement, Aurora will retain the remaining 15% lithium rights and 100% of the non-lithium rights, to focus mainly on developing the Aurora uranium deposit.

Macro has been granted a three-month option period to conduct due diligence and complete formal documentation by paying an option fee of A$50,000 ($31,856).

The option period can be extended for a further three-month period by paying an additional option fee.

If Macro exercises the option, it will issue 666.66 million shares to Aurora, each priced at $0.003, along with an additional 666.66 million options.

The options will be issued in equal tranches, priced at $0.008, $0.012 and $0.016, within five years.

After completion, Aurora will have the right to appoint a nominee director to the board of Macro if it holds a stake of 10% or higher in the shares issued by Macro.

Following completion, Aurora will have the right to appoint a nominee director to Macro's board for as long as Aurora (or its nominee) holds a 10% or greater interest in the number of shares on issue by Macro.

Aurora managing director Greg Cochran said: “We have communicated to the market that Aurora’s primary strategic focus is on our Aurora uranium deposit and that we would consider collaborating with other companies to enable the demonstrated lithium prospectivity on our claims to be explored.

“The proposed transaction with Macro allows Aurora to focus on the development of our advanced, large scale and well-defined uranium deposit, whilst retaining leverage to the increased value of lithium exploration via our significant shareholding in Macro post-transaction.”

The Aurora lithium project is in the Quinn River Valley, Oregon. Covering a total area of 28.5km², it consists of a total of 395 mining claims.