Novo Resources has announced that it has entered into a joint venture (JV) with SQM Australia regarding five of Novo’s prospective lithium and nickel exploration tenements in the West Pilbara.
The companies have entered into a tenement sale agreement, joint venture agreement, and coordination agreement, which together with the tenements are being referred to as the Hardy Battery Metals Joint Venture (HBMJV).
SQM will pay Novo $10 million for a 75 per cent interest in the priority tenements, and for an option over additional Novo Pilbara exploration tenements, with Novo to retain 25 per cent interest, along with 100 per cent ownership of the gold, silver, PGE, copper, lead and zinc mineral rights.
Novo will continue to explore for these minerals across these tenements. Novo’s 25 per cent interest will be free carried by SQM until a decision to mine is made by the HBMJV participants.
Novo will also be entitled to a contingent success payment based on the lithium contained in a JORC compliant ore reserve upon completion of a feasibility study.
Novo has said that the HBMJV with SQM is a significant milestone for the company, providing leverage to battery metals discoveries across a package of tenements adjacent to or in the vicinity of Azure Minerals’ Andover Lithium-Nickel Project and Artemis Resources’ Carlow Castle Gold-Copper-Cobalt Project.
Argonaut PCF acted as financial adviser in relation to the transaction.
If SQM exercises the option to acquire an interest in any of the option tenements, then SQM must reimburse Novo for reasonable costs incurred by Novo to keep the relevant tenements in good standing during the option period.
Each party will have a pre-emptive right in respect of any disposal of the other party’s interest in the HBMJV.
Novo Executive Co-Chairman and Acting CEO, Mike Spreadborough, said that to be participating in a JV with a global lithium leader like SQM is an excellent outcome for Novo and will further boost cash reserves for its primary gold exploration focus.
“SQM can focus on the battery metals prospectivity of the West Pilbara area and our shareholders can benefit from future exploration success with a free-carried interest until a decision to mine,” Mr Spreadborough said.
“SQM has been very active in the Western Australian lithium sector with an approximately 19 per cent shareholding in Azure Minerals, and a 50 per cent JV with Wesfarmers in Mt. Holland, that among other investments demonstrates that SQM clearly sees the potential of Western Australia for battery metals, as do we for gold.
“This joint venture expands Novo’s lithium exploration exposure given the existing lithium Quartz Hill JV with Liatam Mining.”
