Lithium Australia Signs German MoU and Farm-In Deal

THE BOURSE WHISPERER: Lithium Australia (ASX: LIT) has entered into a binding Memorandum of Understanding (MoU) to form a Joint Venture with Tin International AG, a subsidiary of German-listed company Deutsche Rohstoff AG.

Lithium Australia explained the JV will include the Sadisdorf deposit, located in Saxony, Germany.

Under the terms of the deal, Lithium Australia has the right to earn 15 per cent of the to-be-established company by spending a total of EUR 750,000 on exploration at Sadisdorf until the end of 2017.

Alternatively, the company can elect to pay the outstanding amount in cash to Tin International by year-end.

By investment of a further EUR 1.25 million over a three-year period Lithium Australia has the right to further increase its interest in the JV Company to 50 per cent.

After the completion of this ‘earn-in’ period, the partners equally bear the project development costs or are diluted accordingly.

“Sadisdorf has mine openings, historic tin production and a well identified lithium halo through and around the JORC Resource,” Lithium Australia managing director Adrian Griffin said in the company’s announcement to the Australian Securities Exchange.

“This is a great opportunity to establish a substantial lithium resource to feed a Sileach processing facility in Europe.”

Lithiun Australia will be manager of the JV, which aims to extend and upgrade the existing Sadisdorf JORC 2012-compliant Inferred resource of 3.36 million tonnes at 44 per cent tin at a cutoff of 0.25 per cent tin.

From tis the aim is to delineate a lithium resource which is anticipated to be associated with the tin mineralisation.

The tin orebody is thought to contain the order of 15 per cent zinnwaldite, which Lithium Australia explained to be a lithium mica considered to be very easily treated with the company’s registered Sileach process.

“We are pleased about the signed MoU,” Deutsche Rohstoff CEO Thomas Gutschlag said.

“Lithium Australia brings a wealth of processing technology and knowledge that will potentially enable the extraction of lithium as by-product from the tin production and will make Sadisdorf an economically viable project.”