Mining Technology

Daily Newsletter

10 August 2023

Daily Newsletter

Perpetual intends to expand lithium portfolio in Brazil

The three permits cover 4,969.16ha and are located in Minas Gerais, Brazil.

ASX-listed mining company Perpetual Resources has signed a binding option agreement with RTB Geologia E Mineração (RTB) to acquire a 100% interest in three lithium exploration permits in Brazil.

The permits comprise an area, referred to as the Ponte Nova Prospects.

Located in Minas Gerais, the permits are embodied in the Mineral Processes of the Brazilian National Mining Agency (ANM) and cover a total area of 4,969.16ha.

Perpetual claims that the permits are situated in a modelled pegmatite corridor that runs from Latin Resources’ Salinas lithium project and through the Colina Lithium deposit and potentially further north-east.

Perpetual managing director Robert Benussi said: “We have moved quickly and decisively to build a commanding land position in what has become the premier spodumene area in Brazil, which boasts several tier one deposits either adjacent or on-trend from the tenements we have secured under option, and which have earned the region the label of the 'Lithium Valley' of Brazil.

“We also are forging a close working relationship with the permit vendor group and several other in-country specialists, which gives Perpetual significant capacity to quickly assess these compelling exploration ground positions and ultimately quickly add value through exploration activities.”

The company has until 29 September 2023 to complete due diligence and can opt to either continue with the deal or abandon it, without extra costs.

If Perpetual plans to continue with the transaction, it will have to make an initial cash payment of A$25,000 ($16,325). It will be followed by another cash payment of A$150,000 ($97,953) within five days after the due diligence period.

In addition, the company also needs to issue ten million shares and 12.5 million unlisted options at A$0.03 ($0.019) with a two-year expiry date, to RTB within five days after the due diligence period.

Only after the payments in cash and issues of shares and options, RTB will transfer the 100% interest in the permits to the company.

RTB is also entitled to receive a 2% net smelter return (NSR) royalty over the minerals produced at the permits. Perpetual must pay A$500,000 ($326,513) to buy back half of the royalty.

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.