- Graphite producer Bass Metals (BSM) has signed a binding term sheet for the proposed acquisition of Blackearth SA
- Blackearth SA holds an option agreement to fully acquire the San Jorge Lithium Brine Project in Argentina’s Catamarca province
- To acquire Blackearth SA, Bass Metals will pay an all-share consideration in milestone payments
- After the Blackearth acquisition is complete, the company plans to conduct a substantial work program at San Jorge over 2021 and 2022
- Bass Metals is down 16.67 per cent and trading at one cent per share
Graphite producer Bass Metals (BSM) has signed a binding term sheet for the proposed acquisition of Blackearth SA.
Blackearth SA is attractive to Bass Metals because it currently holds an option agreement to fully acquire the San Jorge Lithium Brine Project. San Jorge consists of 15 granted exploration sites, covering a combined 36,600 hectares.
The project is located in Argentina’s Catamarca province — a region that accounts for over half of the world’s annual lithium production.
In order to acquire Blackearth SA and the San Jorge Project, Bass Metals will pay an all-share consideration, which will be issued at various intervals in milestone payments.
Upon completion of the acquisition, the company will issue the initial consideration of 150 million Bass Metals shares. 60 per cent of this amount will be subject to voluntary escrow for the 12 months following the date of issue.
The next milestone payment will depend on the company being granted the necessary permits to allow exploration activities. These activities will include a geophysical survey, trenching, auguring, brine sampling and shallow drilling.
Nine months after these permits are granted, Bass Metals will issue 100 million more company shares.
Once the company achieves a JORC-compliant inferred mineral resource of 250,000 tonnes at a lithium grade of 200 milligrams per litre, Bass Metals will issue $1 million worth of company shares.
Finally, once Bass Metals achieves a measured and indicated mineral resource JORC estimate of 200,000 tonnes at a lithium grade of 200 milligrams per litre, the company will issue another $1 million worth of company shares.
Once the deal finalises, Bass Metals intends to conduct a substantial work program at the San Jorge Project over 2021 and 2022.
While investment payments into the project can be accelerated to increase equity at any time, it is likely that Blackearth SA will fully acquire the San Jorge Project sometime after December 1, 2025.
Bass Metals’ Chairman, Rick Anthon, believes that the lithium and graphite markets will be in deficit after 2025, which the company expects will drive up prices in both commodities.
“We are delighted to execute an agreement over the San Jorge Project, as it has the potential to deliver significant value to the company’s shareholders,” he said.
“The San Jorge Project is strongly complementary to the company’s existing graphite and lithium assets, and positions Bass to become a wholly integrated producer of graphite and lithium delivering into the rapidly expanding global battery supply chain,” he added.
Bass Metals is down 16.67 per cent, trading at one cent per share at 11:17 am AEDT.