Galileo and MinRes shares gain on lithium JV
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More news: Galileo Mining and Mineral Resources (MinRes) shares both gained on the ASX after announcing a farm-in and joint venture agreement for lithium exploration at the Norseman Project in Western Australia.
Galileo shares lifted 16.3% to $0.29 while MinRes added 1% to $72.37 by 11:45am AEST.
Galileo Mining agrees lithium farm-in and JV with MinRes
The news: Galileo Mining will sell 30% of its lithium rights on its Norseman Project in Western Australia to Mineral Resources (MinRes), as part of a farm-in and joint venture agreement with its large-cap rival.
The numbers: MinRes and Galileo will form a 30%/70% unincorporated joint venture at Norseman, with Galileo selling 30% of its lithium rights at the project for a purchase price of $7.5 million.
MinRes holds the option to increase its stake to 55% by sole funding an additional $15 million of exploration expenditure over four years. The lithium major also has the option to increase its stake to 70% by sole funding expenditure through to a 'decision to mine'.
The context: Galileo said that after the exploration stage at Norseman is completed, the two companies will enter into a separating mining joint venture agreement on "substantially" the same terms and conditions as the exploration deal.
Galileo will retain ownership of the project's tenements and all rights to nickel, platinum group elements (PGEs), and all minerals other than those contained within lithium-bearing rocks.
What they said: Galileo's managing director Brad Underwood said: "Galileo will benefit from a focussed program of lithium exploration by MinRes, one of Australia's pre-eminent lithium companies, as well as increasing our cash reserves to aggressively pursue other high value resource discoveries at both our Norseman and Fraser Range projects".
The source: ASX announcement
