Charger (ASX:CHR) buddies with Rio at Lake Johnston Lithium Project
Charger Metals will partner with Rio Tinto Exploration (ASX:RTX) as the ink drys on a $2 million deal to fully own Lake Johnson from minority stakeholder Lithium Australia Limited (ASX: LIT).
The Rio farm-in agreement includes $500,000 upfront from the subsidiary of the world’s second-largest miner.
Rio will invest a further $1.2 million in Charger before the farm-in begins.
The deal, unfolding just 10 days after the identification of new lithium targets at Lake Johnston, requires Rio to spend a minimum $3 million in exploration expenditure over the first 12 months.
RTX can earn 51% by funding $10M in exploration and paying Charger $1.5M. Or, they can earn 75% by funding $40M in exploration or completing a Definitive Feasibility Study.
Charger Managing Director Aiden Platel says the RTX deal reaffirms the prospectivity of the Lake Johnston Lithium Project and its potential to host a large-scale lithium deposit.
“The Rio Tinto Exploration farm-in agreement is an excellent result for Charger and its shareholders and reaffirms our belief that the Lake Johnston Project has the potential to host a large-scale lithium deposit.
“The planned significant investment by RTX will allow thorough systematic exploration over all of the project tenure, with initial exploration focused on fast-tracking the Medcalf Spodumene Prospect as well as progressing the Mt Day and Mt Gordon lithium prospects.”
“The Rio Tinto Exploration farm-in agreement will see them potentially spending up to $42.5 million to earn up to a 75% interest in the Lake Johnston Project,” Charger’s Chairman Adrian Griffin added.
“The largely unexplored Lake Johnston Greenstone belt now hosts multiple spodumene discoveries and, with the recent focus and increasing exploration activity, could evolve into a prominent lithium province.”
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