Arizona Lithium has teamed up with some local muscle in a strategic alliance with the Navajo Traditional Energy Company. Pic via Getty Images.
Arizona Lithium gets mining muscle in its corner at Big Sandy
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Arizona Lithium is taking a huge chunk of uncertainty out of its push to develop the Big Sandy lithium project by forming a strategic alliance with Navajo Transitional Energy Company (NTEC).
NTEC, which is wholly-owned by the Navajo Nation, operates the Navajo coal mine and other mines in Montana and Wyoming while seeking to promote the development of the Navajo Nation’s resources and new sources of energy, power, and transmission.
Under the strategic alliance with Arizona Lithium (ASX:AZL), NTEC will manage all permitting and contract mining services at Big Sandy and will become a substantial shareholder of the company by meeting certain mining development milestones.
The non-binding terms sheet allows for the commencement of initial work by both parties on the development of the Big Sandy project while providing time for further mutual due diligence over six months and the development of a final definitive agreement.
“We are extremely pleased to have entered a Strategic Alliance Terms Sheet with NTEC, as this represents a monumental breakthrough in the sustainable development of Big Sandy,” managing director Paul Lloyd said.
“Through our initial agreement, and subject to agreeing definitive agreements, NTEC will take over the operational development of Big Sandy and will manage all aspects from the permitting requirements for additional exploratory drilling process through to mine design, environmental assessments, construction, and contract mining operations for the project.
“We look forward to working with such an impressive and professional energy company as we continue to advance Big Sandy to lithium production.”
Strategic alliance
Under the terms sheet, which is subject to the final agreement, NTEC could be entitled to the issue of up to 192 million AZL shares at a notional price of 12c each along with attaching options by completing various project milestones.
These include:
- Approval of NTEC scope of works for environmental baseline studies;
- Preparation of the Plan of Operations to be submitted to the BLM;
- Completion of the Preliminary Economic Assessment (PEA);
- Mine planning for the Definitive Feasibility Study (DFS);
- Final Mine design; and
- Construction of Mine.
NTEC will also be designated as the mine operator and will manage and execute all programs and spending in accordance with an approved budget.
Its entry means that Arizona Lithium can rely on an experienced mine operator to drive development of Big Sandy, which currently has a very shallow, flat lying mineralised sedimentary lithium resource of 32.5Mt grading 1,850 parts per million lithium, or 320,800t of contained lithium carbonate equivalent.
Notably, this resource represents just 4% of the Big Sandy project area, which hosts an Exploration Target of between 271.1Mt and 483.15Mt at grades of 1,000ppm to 2,000ppm lithium.
The company recently started a Definitive Feasibility Study on Big Sandy following encouraging results from a Scoping Study.
This article was developed in collaboration with Arizona Lithium (ASX:AZL), a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
