Another article about AALArticle published by the mining journal. AAL is getting more and more notice..
Advantage Lithium M&A spurt
Less than a month after securing an option over five assets in the Clayton Valley of Nevada, US, Advantage Lithium has struck another two deals to gain exposure to brine deposits in Mexico and Argentina respectively.
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Daniel Gleeson · 16 Sep 2016
· 9:28
The ink was barely dry on its C$3.8 million (US$2.9 million) option agreement with Nevada Sunrise Gold before it agreed these pacts, which will increase its lithium exposure to 10 brine assets, over some 45,000ha.
The TSX-V-listed company is about to start drilling on its flagship Clayton Valley NE project, which lies 110m from a pumping station at the only lithium operation in North America (Albermarle’s Silver Peak), but at the same time it is looking to use investor favour towards lithium to corner the junior market and acquire early-stage brine assets in strategic locations.
The first deal has seen the company sign a pact with TSX-V-listed Radius Gold where it can earn up to 70% of four lithium brine projects in the Mexican states of Chihuahua and Coahuila.
While Mexico is not renowned for hosting lithium brine deposits, Advantage thinks the geological settings of the four assets are analogous to the Clayton Valley Basin, where it has just acquired an
option over a batch of assets.
The Mexico assets – La Union, La Union 2, Santa Maria and La Viesca – are located in large salar basins. Work by the Mexican Geological Survey includes a 1982 drill hole at La Union (Chihuahua), which returned a brine sample of 0.0283% Li, while Radius, which stumbled on the assets as it was exploring for gold in north Mexico, has reported a surface sample of 0.0189% Li at La Viesca (Coahuila).
To earn a 70% stake, the company will have to pay Radius C$75,000 in cash, issue 1 million shares, carry out C$1.5 million of exploration work and complete a prefeasibility study over a given time frame. Renowned prospector and financier Simon Ridgway, who heads up Radius Gold, will be appointed to the Advantage Lithium advisory board upon closing of the agreement.
The second deal could see the company acquire 100% of the Stella Marys project in Salta province of Argentina, a 1,472ha property in the Salina Grandes salar, which is just 140km from Orocobre’s Olaroz lithium operation.
The project is located immediately adjacent to the Salar de Salinas Grandes lithium-potassium-boron brine project, 85%-owned by Orocobre, which hosts an inferred resource of 239,200 tonnes of lithium carbonate equivalent and is being explored further by the ASX and TSX-listed company. Advantage has suggested the shallow inferred resource Orocobre has defined could extend onto the Stella Marys property.
The asset has seen mapping, sampling, geochemistry, drilling and preliminary engineering work carried out on it, with due diligence set to unveil the results.
Advantage has negotiated a staged deal consisting of US$1.25 million of cash payments and 1.5 million shares for the assets.
Both deals, if cemented, will add to the five projects Advantage Lithium can earn a major stake in within the Clayton Valley of Nevada.
Only last month, interim CEO Dev Randhawa – who also heads up Fission Uranium – said the company was finalising details for a geophysics and drill programme, costing US$150,000-$200,000, at its flagship Clayton NE project, to be followed by drilling at Neptune (50% option), which has a previously reported intercept of 0.0156% Li over 65.5m, Jackson Walsh (up to 70% option) and Gemini (50% option).
Having listed on the Venture exchange and closed a C$4 million fundraising only last month, the company, headed up by start-up specialist David Sidoo following Randhawa’s resignation, went back to shareholders in early September for a C$5 million cash call. As a result, the C$21 million capitalised company should be well covered to fund these acquisitions and the initial exploration work in Nevada.