At the same time, Charger Metals also agreed to acquire the remaining 30% interest in the project from Lithium Australia for A$2 million. Upon completion of this move, the company will own 100% of the lithium project.
Under the farm agreement, RTX will reimburse Charger A$500,000 for exploration costs.
RTX secured the rights to acquire a 51% interest in the project by providing exclusive financing of A$10 million over four years for exploration and related costs.
This includes an exploration commitment of at least A$3 million in the first 12 months, followed by A$1 million per annum thereafter.
The first-year exploration program will be managed by Charger in consultation with RTX.
The company will also pay Charger A$500,000 at the end of the exploration commitment.
In addition, an additional A$500,000 will be payable if significant results greater than 20m wide and with a lithium oxide (Li2O) concentration exceeding 1.2% occur during the drilling program.
Upon completion of the first phase of profitability, RTX will acquire exclusive rights to an additional 24% interest in the project by exclusively funding a definitive feasibility study and $30 million in additional exploration and related expenses during the profitability phase. second stage.
If RTX chooses the second phase, it will need to pay an additional A$1 million to Charger.
If the company decides not to complete this phase, it must transfer 2% of its shares to Charger, keeping its ownership at 51%.
The terms of the agreement also contain a dilution provision. If a party’s diluted share of the project is less than 10%, its share will be converted into a 1.25% gross sales royalty for the first 15 years of commercial production.
Charger Metals managing director Aidan Platel said: “The exploration agreement with Rio Tinto is an excellent outcome for Charger and its shareholders and reinforces our belief that the Johnston Lake project has the potential to contain significant lithium deposits .”
“RTX plans significant investment in rigorous, systematic exploration throughout the life of the project, with initial exploration focused on rapid development of the Medcalf spodumene project and further development of the Mt Day and Mt Gordon lithium projects.”
The Lake Johnston Lithium Project is located 450 kilometers from Perth, Western Australia.
Target areas include the Medcalf spodumene project, the Mt Gordon lithium project and the majority of the Mount Day lithium cesium tantalum (LCT) pegmatite field.