Piedmont Lithium, an ASX-listed lithium miner, has agreed to invest C$2m ($1.47m) to acquire a 19.9% stake in Vinland Lithium, a newly formed Canadian mining company.
Vinland Lithium is owned by Sokoman Minerals and Benton Resources, each holding a 40.1% interest.
As part of the investment, Piedmont may also earn up to a 62.5% stake in Killick Lithium, a subsidiary of Vinland that owns the Killick Lithium Project in Newfoundland, Canada.
It will also be authorised with 100% marketing rights and a right of first refusal on 100% offtake rights to any lithium produced from the project on a life-of-mine basis.
In geological terms, the Killick Lithium Project is said to be similar to the Carolina Tin-Spodumene Belt, which hosts Piedmont’s Carolina Lithium Project.
It covers 950km² of land and hosts around 60km² of prospective strike length.
Sokoman and Benton conducted initial prospecting in 2021, which led to the discovery of the first occurrence of spodumene-bearing pegmatite at the project.
Initial drills at the site revealed several intercepts with more than 1% lithium oxide (Li2O) with a potential for additional discoveries within the property.
Piedmont stated that within 30 days of executing the earn-in agreement, it will gain the option to acquire up to a 16.35% stake in the project.
Its initial stake will be conditional upon issuing of its shares to Sokoman and Benton, for an amounting totalling C$2m.
It also agreed to spend at least C$6m for prospecting, exploration, development and production within 30 months of the initial earn-in right.
Within 60 days from funding of initial earn-in, Piedmont will earn an option to take another 21.65% stake in the project.
To acquire this additional interest, it will further need to issue its shares worth C$2m to the two companies.
It will need to spend at least C$3m on the project’s prospecting, exploration, development and production expenses within 12 months from the first additional earn-in right.
To earn interest for the third time, it will have an option within 60 days from the second funding for a stake of 24.5%.
The company will need to issue its shares worth C$6m to Sokoman and Benton.
It will also need to provide C$3m in funding for prospecting, exploration, development and production at the project within 12 months from the third earn-in right.
Furthermore, the company will have to pay a 2% net smelter royalty (NSR) to Sokoman and Benton, with an option to repurchase half of the NSR by paying C$2m.
Piedmont Lithium chief operating officer Patrick Brindle said: “The Killick Lithium Project comprises a vast land package in an attractive jurisdiction. Our team has visited the site on multiple occasions and conducted extensive due diligence. Early exploration results are favourable, and the project’s location is advantageous in terms of infrastructure and logistics. The Vinland Lithium exploration team is highly experienced and will manage all aspects of the exploration program.
“While we help fund exploration activities at Killick Lithium, our projects and operations teams remain focused on the ongoing development of our core portfolio including the producing North American Lithium mine in Quebec and our planned operations in Ghana, Tennessee and North Carolina.”
