Power Minerals (ASX:PNN) progresses incorporation of Rincon Lithium Joint Venture

Power Minerals Limited has reported that final documentation required for the formation of the Rincon Lithium Project Joint Venture entity is now complete, with the company and its investment partner Navigate Energy preparing to finalise incorporation of the Argentinian company through which the joint venture will operate.

The update confirms that the process to release Navigate Energy’s US$4 million investment in the Rincon Project is nearing completion, marking a key step in advancing the project within the Salta province of Argentina.

Highlights

• Documentation for the creation of the Rincon JV entity and the release of the US$4 million investment has been finalised.
• Both parties hold foreign shareholder registration status which allows ownership of shares in the Rincon JV project company.
• Documentation has been completed for incorporation of the Rincon JV project company and the transfer of the Rincon Lithium Project tenure.
• Anticipated near term incorporation of the Rincon JV project company and asset transfer will be a major milestone for the transaction.
• The Rincon Project contains a JORC 2012 Mineral Resource of 292,564 tonnes LCE and a completed Preliminary Economic Assessment to Scoping Study standard.

The joint venture will operate through an incorporated JV company, following Power Minerals and Navigate Energy entering into the Rincon Joint Venture Agreement in August 2024.

The parties have advanced the documentation required to incorporate the company and ensure that the agreement is effective under Argentinian law.

Foreign shareholder registration approvals, described as a key precondition for the parties to become shareholders in the Argentinian JV company, have also been secured.

The final step in the incorporation process is for the Notary Public to request the Salta Mining Court to issue a certificate of currency for the Rincon Project tenure before signing the Public Deed.

After lodgement of the executed Public Deed with the relevant regulator, Navigate Energy’s US$4 million investment funding will be progressively remitted to the Rincon JV account as agreed under the Rincon JVA.

Banking arrangements are in place with the Industrial and Commercial Bank of China in Salta, supported by satisfaction of KYC anti money laundering requirements.

Once incorporated, Power’s Argentinian subsidiary will transfer the mineral tenure of the Rincon Lithium Project into the JV company.

Power will also transfer the Pocitos Project into the Rincon JV entity as agreed under the revised Rincon JVA terms via a Binding Memorandum of Understanding, and the Pocitos Project provides access to rail networks to Pacific and Atlantic ports, power and a freshwater source.

Operationally, the partners have progressed development of a lithium brine pilot plant for brine testing, and the pilot plant will be key to testing the lithium brine qualities and tailoring DLE technology to maximise output from the project.

Investment funds are to be progressively released to the Rincon JV as directed by the JV partners via a regulating Management Committee.

The Rincon Project is the most advanced asset within Power Minerals‘ Salta Lithium Project.

It contains a JORC 2012 Mineral Resource of 292,564 tonnes LCE, and the 2023 Preliminary Economic Assessment indicated forecast annual production of 7,061 tonnes of high purity lithium carbonate.

The assessment also outlined forecast annual revenues of US$194.8 million over an initial 14 year operation, a pre tax NPV of US$501.82 million, a pre tax IRR of 42 per cent, and estimated capital expenditure of US$216.55 million based on a lithium carbonate plant utilising DLE technology.

As Managing Director Mena Habib stated,

“Completing the incorporation of the Rincon JV company and completing the transfer of the Rincon lithium brine mineral tenure enables the investment of US$4 million of Rincon project funding from Power’s JV partner Navigate Energy. With incorporation of the Rincon JV company expected to be completed in the coming weeks, Power and Navigate Energy will action the development of a lithium brine pilot and early stage project development activities at the Rincon Lithium Joint Venture Project. Completing incorporation and asset transfer confirms Power’s strong relationship with Navigate Energy, and is a key step towards realising shareholder value from the Project.”

Power Minerals’ update outlines clear administrative progress that underpins the joint venture’s next operational steps.

The imminent incorporation of the Rincon JV company will enable the transfer of tenure, the establishment of formal investment arrangements and the commencement of pilot plant activities.

Once the entity opens its bank account and receives the initial capital contribution, the partners will be positioned to advance development of the Rincon Lithium Joint Venture Project in accordance with the Rincon JVA and related agreements.

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