Lithium Energy has made a timely, cut price deal to secure ownership of some of the world’s most prospective lithium concessions, less than a fortnight after making a major discovery on the brine rich ground in Argentina’s vaunted ‘Lithium Triangle’.
Lithium Energy (ASX:LEL) can now lay full claim to the Solaroz project, located next door to Allkem’s (ASX:AKE) Olaroz brine development and Lithium Americas’ ground on the Salar de Olaroz basin, after the early exercise of the option for its 90% owned Argentine subsidiary to purchase the 12,000 hectare project.
Under the original option agreement LEL would have made a series of cash and share payments worth US$6.59 million over four years, with the final US$6.33 million still to be paid out to October 2025.
The new agreement will see LEL pay just US$3.84 million ($6 million) in cash now, a 40% discount saving shareholders $3.9 million over the next three years.
Howdy Neighbour!
“Lithium Energy is very pleased to have reached agreement with the owner of the Solaroz concessions to exercise the option early, for a significantly discounted sum,” LEL executive chairman William Johnson said.
“The early option exercise reflects the confidence which the Company has in the tremendous prospectivity of these concessions, given their location being directly adjacent to or principally surrounded by lithium majors Allkem Limited and Lithium Americas Corporation on the Salar de Olaroz basin, together with the Company’s significant lithium discovery in its maiden drillhole at Solaroz.”
LEL has been working to prove its theory that the lithium rich brines feeding Allkem’s Olaroz lithium carbonate plant continue under its tenements.
Initial samples from the very first drillhole of a maiden 10 hole drilling programme at Solaroz returned significant lithium concentrations in excess of 400mg/L from conductive brines in the upper aquifer, above the primary Deep Sandstone lower aquifer target, lauded by the company as a significant discovery.
Lithium prices have charged to record levels in 2022 on the back of a major shortage for the metal and a surge in EV sales in China and Europe.
This article was developed in collaboration with Lithium Energy (ASX:LEL), 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.