Future Battery Minerals has put its money where its mouth is in a $3.5 million deal to become the exclusive owner of the Kangaroo Hills lithium project in Western Australia’s Goldfields region, 17km south of the historic town of Coolgardie.
The company today revealed it has acquired the remaining 20 per cent interest in its joint venture partner Eastern Coolgardie Goldfields from Goldfellas, a wholly-owned subsidiary of Lodestar Minerals. It will pay $500,000 and $3 million worth of shares to Lodestar, while a $3 million performance rights package is also part of the deal.
The cash component will be paid as $250,000 on execution of the agreement, a further $125,000 three months later and a final $125,000 another three months down the track.
The number of fully-paid shares making up the $3 million consideration will be calculated at the 15-day volume-weighted average price in the period immediately prior to the agreement being executed. As part of the deal, $1 million worth of the shares can be traded immediately after being issued, the same amount will be voluntarily escrowed for six months and the remainder will be voluntarily escrowed for a year from the date of issue.
The number of performance rights issued will be equivalent to the number of consideration shares, which will vest and convert into shares upon Future Battery Minerals announcing a mineral resource estimate of at least 10 million tonnes at 1.0 per cent lithium oxide for Kangaroo Hills.
This is a significant step in FBM becoming the next lithium producer in Western Australia. The acquisition of the remaining 20% interest confirms the belief and potential we see at Kangaroo Hills and allows us to confidently move forward with our strategic plans for the project. Both diamond core and reverse circulation (RC) drilling is underway together with metallurgical test work on core samples taken at Kangaroo Hills. We look forward to updating the market further as we progress on these important activities. Future Battery Minerals executive chairman Mike Edwards
Spodumene mineralisation seen at Kangaroo Hills’ Big Red prospect within pegmatites was discovered during regional exploration drilling in March last year. Exploration efforts to date have significantly expanded on initial results and the company has now conducted two rounds of drilling, with 47 holes through 6000m.
Big Red has turned some heads with assays as high as 29m at 1.36 per cent lithium oxide from 38m, 27m at 1.32 per cent from 64m, 23m at 1.03 per cent from 53m, 19m at 1.03 per cent from 42m, 13m at 1.23 per cent from 41m and a shallow hit of 16m at 1.09 per cent from 11m.
Conveniently sitting in the epicentre of WA’s mining industry about 50km north-east of Kalgoorlie, Kangaroo Hills has easy access to a skilled local workforce, critical development infrastructure and shire-maintained sealed roads, giving the company a solid head-start towards development.
Future Battery Minerals is not alone in its search for lithium in the area, with neighbouring giant Mineral Resources operating a mine 30km to the east of Kangaroo Hills at Mount Marion, which boasts an impressive mineral resource of 60.5 million tonnes at 1.36 per cent lithium oxide.
Another neighbour, Widgie Nickel, is sitting on shallow 481,000 tonnes at 0.59 per cent lithium oxide at its Faraday deposit, with a high-grade core of 106,000 tonnes at 0.87 per cent lithium oxide, about 50km to the south-east. Alliance Mineral Assets has about 26.5 million tonnes at 1.0 per cent lithium, about 100km south-east of Kangaroo Hills.
In addition to its WA lithium pay, Future Battery Minerals recently confirmed the presence of shallow and thick lithium-bearing claystone at its Lone Mountain prospect in Nevada, recording two solid 170m hits at the operation. Management says the results highlight a mineralised footprint that currently measures 3km by 1.3km, with a further 2km of prospective strike open to the south.
The company says one hole recorded a 179.8m intercept with 766 parts per million lithium from 39.6m, including 19.8m at 1010ppm lithium from 80.8m. A second hole went 170.7m at 764ppm lithium from 67.1m to the end of the hole, including 27.4m at 1030ppm lithium from 112.8m.
A maiden mineral resource for the Nevada operation in planned for next year’s first quarter.
The consolidation of Kangaroo Hills signals Future Battery Minerals’ commitment to lithium in an area better known as WA gold-mining heartland. As lithium prices recover from mid-year lows, the company seems well positioned to take advantage of its exclusive rights to the prospective pegmatite-bearing ground, adding flavour to its existing resource inventory of about 25,000 tonnes of contained nickel.
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