- Altura Mining (AJM) has executed a letter of intent for an earn-in option agreement on Lithium Corporation’s Fish Lake Valley Project
- Under the agreement, the company will have the option to earn a 60 per cent interest in the project over four years
- Altura Mining must conduct exploration at the project and incur at least US$2 million (A$2.58 million) in expenditure to earn the interest
- The company will also have the option to increase its interest in the project to full ownership, in return for further remuneration
- Altura Mining’s shares have been suspended from trading since August 2020, when they last traded at seven cents per share
Altura Mining (AJM) has executed a letter of intent for an earn-in option agreement on Lithium Corporation’s Fish Lake Valley Project.
The Fish Lake Valley (FLV) Lithium Project is located in Nevada’s Esmeralda County in the United States. According to the company, the lithium project may prove a valuable asset as the U.S. establishes and expands its growing electric vehicle (EV) industry.
Under the agreement, Altura Mining will have the option to earn a 60 per cent interest in the FLV Project, over four years. The company has been a shareholder in Lithium Corporation since 2012, but now intends to upgrade its passive interest to an active project involvement.
Altura will pay an initial US$50,000 (approximately A$64,700) upon signing the letter of intent, securing an exclusive 60-day period in which to complete documentation and due diligence.
Under the earn-in option agreement (EOA), the company will earn the interest by conducting exploration at the project and incurring a certain amount of related expenditure. Altura’s expenditure relating to exploration, assessments, resource and feasibility studies of the claim must amount to at least an aggregate US$2 million (approximately A$2.58 million).
In the first year, the company must spend a minimum annual expenditure of US$200,000 (roughly A$258,800), followed by at least US$400,000 (approximately A$517,600) in the second.
In year three, Altura’s minimum annual expenditure at the project must be US$600,000 (roughly A$776,400), followed by at least US$800,000 (approximately A$1,035,200) in the fourth.
In addition to these expenditure commitments, Altura must make payments in cash and shares to Lithium Corp, once the EOA is executed. Upon signing the EOA, the company will pay Lithium Corp US$100,000 (approximately A$129,400), plus US$100,000 equivalent in Altura shares.
On the signing’s first anniversary, Altura will pay another US$100,000, plus US$100,000 equivalent in Altura shares. On the second anniversary, the company will pay US$125,000 (roughly A$161,750), plus US$100,000 equivalent in Altura shares.
At the third anniversary, Altura will pay Lithium Corp US$150,000 (approximately A$194,100), plus US$100,000 in Altura shares. On the fourth anniversary, the company will pay another US$150,000, plus US$100,000 in Altura shares.
Altura will also have the option to purchase an additional 20 per cent interest in FLV, within one year of completing the initial earn-in. This can be achieved by the company paying Lithium Corporation US$1.75 million (about A$2.26 million).
Furthermore, Altura has another option to buy the final remaining 20 per cent interest, within two years of earn-in completion. This will cost the company another US$1.75 million.
If Altura gains 100 per cent ownership of the FLV Project, the company will execute a 2.5 per cent net smelter royalty with Lithium Corporation.
Altura Mining’s CEO, Alex Cheeseman, called the deal with Lithium Corporation a logical progression of the companies’ existing relationship, especially with regards to the Fish Lake Valley Lithium Project’s development path.
“Together we have the strengths of local expertise with decades of mineral evaluation experience and international battery material relationships forged over a number of years in the industry,” he said.
“This project is in one of the best possible global locations, combining a Tier 1 mining jurisdiction with access to infrastructure, workforce and lithium market increasingly focused on localised supply,” he added.
Alex concluded by stating the company’s intention to pursue a rapid development path at the Fish Lake Valley Project.
Altura Mining’s shares have been suspended from trading since August 2020, when they last traded at seven cents per share.