THE BOURSE WHISPERER: Lithex Resources (ASX:LTX) has executed a Heads of Agreement (HoA) for the acquisition of eleven graphite tenements located within Australia.
The acquisition of the tenements is via Lithex’s acquisition of Far North Minerals (FNM), pursuant to the HoA.
FNM owns the rights to 100 per cent of the tenements.
Lithex said the acquisition was consistent with its focus on strategic minerals.
“The tenement package delivers the company a major new opportunity in the graphite market, which has seen prices more than double since 2009 and which is facing future growth potential, with strong demand for corrosion resistant alloys and structural strength in castings; together with new and expanding demand for Li-ion batteries used in electric vehicles,” Lithex Resources said in its ASX announcement.
The graphite tenement package comprises eleven tenements with a total area of 533 square kilometres located in four Australian States.
Location of graphite projects. Source: Company announcement
Three tenements make up the Munglinup project in Western Australia, one comprises the Eyre Point project in South Australia, five cover various historical showings located in New South Wales, one covers the Furniss East project in Western Australia, and one covers the Emu Plain project located in Queensland.
The projects are located in the main known graphite provinces in Australia, including the Munglinup Region of Western Australia and the Eyre Peninsula of South Australia.
Lithex indicated that no recent or systematic exploration has been carried out for graphite on any of the acquired tenements, which it said are considered to be prospective for occurrences of graphite.
The HoA contains a number of conditions precedent before completion, including due diligence and review of the transaction in accordance with the ASX Listing Rules.
On completion of the transaction, to be approved by shareholders, Lithex will provide the vendors or their nominees the following consideration:
– $150,000 in cash;
– 12 million LTX shares issued at six cents per share;
– 10 million options exercisable at eight cent with an expiry of 31 December 2015; and
– 10 million options exercisable at sixteen cents with an expiry of 31 December 2016.
Under the terms of the HoA Lithex has agreed to reimburse FNM exploration costs of up to $50,000 to the completion date to continue development work on the Munglinup project.