CHR is looking to benefit from Rio Tinto’s farm-in to Lake Johnston. Pic via Getty Images
Charger Metals pieces together ownership and funding blocks for Lake Johnston lithium project
Mining
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- Charger to receive $1.7m next month as part of its lucrative farm-in with Rio Tinto
- Farm-in agreement sees Rio spending up to $42.5m to earn 75% in Lake Johnston
- Simultaneously, CHR to pay $2m to secure 100% of the Lake Johnston project
Special Report: Charger Metals has met funding conditions for Rio Tinto to grab up to 75% of its Lake Johnston lithium project and potentially spend up to $42.5m across the largely underexplored tenure.
Simultaneously, Charger Metals (ASX:CHR) has entered a binding agreement to pay $2m to Lithium Australia to increase its interest in Lake Johnston to 100%.
Located east of Norseman, Lake Johnston is best known for Poseidon Nickel’s (ASX:POS) mothballed Maggie Hays and Emily Ann nickel mines and the Lake Johnston plant, and comes after a rush into the region started by TG Metals (ASX:TG6) proving up its Burmeister spodumene prospect.
Rio’s farm-in has been spurred on by three rock chip assays from a newly discovered pegmatite that all showed high-grade lithium results of 4.2%, 3.7% and 3.6% Li2O over a 1.2km trend towards the project’s Medcalf prospect.
Agreement terms
CHR is confirmed to receive $1.2m from Rio Tinto’s (ASX:RIO) exploration arm RTX and another $500,000 before the farm-in starts, where $3m will be spent on exploration over the next 12 months.
The funds will give RTX a 6.08% stake in CHR, which will only increase over exploration spending and time markers.
Preparations are well-advanced in that realm, with drilling to recommence at Lake Johnston next month.
CHR MD Aidan Platel says the farm-in agreement with Rio is an excellent result for the company and its shareholders, and validation the Lake Johnston Project can host a large-scale lithium deposit.
“The planned significant investment by RTX will allow thorough systematic exploration over the entire 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,” Platel says.
“The RTX farm-in agreement and recent placement ensures CHR will be well funded going forward with only ~73 million shares on issue.”
This article was developed in collaboration with Charger Metals, 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.
