Gold Mountain spreading its wings with entry into Brazilian lithium

Gold Mountain is looking to introduce some diversity into its portfolio, signing a binding heads of agreement to acquire up to 75% in a package of Brazilian lithium licences.

The agreement with Mars Mines gives the company an exclusive 60 day licence to acquire four separate project areas covering 285km2 over parts of the highly prospective Borborema Province and São Francisco craton within the eastern Brazilian lithium belt which covers all known past and present lithium producing districts in the country.

All four projects are located in areas known to host lithium-bearing pegmatites and are along strike from and covering known pegmatite bodies.

Gold Mountain’s (ASX:GMN) move comes amidst strong demand for lithium as the world continues to push towards net zero and increased investment activity for the battery metal in Brazil.

“We are excited about the proposed acquisition of up to 75% interest in these highly prospective lithium projects in northeastern Brazil,” chief executive officer Tim Cameron said.

“Over the last number of months, we have been reviewing a range of potential acquisition opportunities to diversify our project portfolio; we believe that, given the location and commodity, these projects offer the company the best opportunity to increase shareholder value.

“Brazil has seen increased interest from junior explorers and major mining houses, with the region being home to a number of lithium projects.”

Projects and acquisition terms

Subject to shareholder approval, the company plans to acquire an initial 20% in the Cerro Cora and Porta D’Agua, Custodia, Juremal and Jacurici project areas through the issue of shares and options to Mars.

It can then earn a further 55% through incurring project expenditure of $2.75m over a two-year period.

The Cerro Cora and Porta D’Agua project comprises three tenements that lie within the Brasiliano Orogen where pegmatite-related minerals have been recorded in and adjacent to the tenement areas.

Despite the abundance of tantalum, niobium and LCT1 pegmatite minerals, this underexplored area has never been sampled and analysed for lithium by previous exploration companies.

gold mountain asx gmn — Location of Gold Mountain’s new lithium project areas in Brazil. Pic: Supplied

Juremal covers a series of pegmatites outcropping in an orthogonal pattern over an area of 25km by 15km, some of which are being mined for quartz.

Meanwhile, Jacurici is underlain by Archaean sequences which are also covered by an existing and directly adjacent competitor lithium tenement.

Lithium pegmatites have been reported within the granted Custodia project tenements by Neliton Santos, Mars Mines’ local geologist.

The vendor has also carried out a soil and rock chip sample program and identified visible spodumene in pegmatite with samples currently at the laboratory for analysis.

Upcoming plans

Gold Mountain plans to aggressively advance its Mars lithium portfolio by carrying out a desktop review of available datasets, and carrying out detailed geological mapping and stream sediment sampling on most project areas.

It will also carry out first pass rock chip sampling on all projects, grid-based soil geochemical sampling, and diamond drilling of lithium-bearing pegmatites.

This work will be carried out in parallel to activities at its Wabag copper-gold project, in Papua New Guinea

This article was developed in collaboration with Gold Mountain, 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.