Zenith Minerals has announced that it has regained 100 per cent control of the Split Rocks Lithium Project and the Waratah Well Project, both located in Western Australia.
In January 2022, Zenith granted a subsidiary of EV Metals Group (EVM) the opportunity to earn a 60 per cent interest in the Split Rocks and Waratah Well lithium projects in Western Australia, by sole funding the completion of a feasibility study before January 2024.
As part of the earn-in agreement, EVM and its nominees completed subscriptions of $6 million for 20 million shares in the capital of Zenith at an issue price of $0.30 per share on 19 January 2023.
Under the relevant agreement:
- The feasibility study had to have a Mineral Resource of a minimum of 35Mt at 1.2 per cent lithium oxide (Li₂O) and be capable of producing 330,000t of spodumene concentrate with a grade of not less than six per cent (Li₂O) for a minimum of a ten-year period
- If EVM failed to complete the feasibility study prior to 10 January 2024, then it would be deemed to have withdrawn from the earn-in and the agreement would terminate on 10 January 2024
Although EVM incurred expenditure on the lithium projects, EVM did not carry out any significant onground exploration activity on Zenith’s Split Rocks and Waratah Well lithium projects in 2023 to satisfy each of the above conditions.
Given that neither of these conditions have been met, under the terms of the earn-in agreement EVM has been deemed to have withdrawn from the agreement.
The tenements, comprising both lithium projects, have always been retained by a wholly owned subsidiary of Zenith, so there are no additional administrative steps required for the company to regain full ownership and control of the lithium projects.
An amount of approximately $1 million in outstanding refunds is owed by EVM to Zenith. The amount relates to tenement rents and rates, Zenith staffing costs, and other exploration costs incurred by the company under the EVM earn-in agreement during 2022 and 2023.
Zenith Minerals Managing Director, Michael Clifford, said that Zenith is pleased to have regained full control of its key Western Australian lithium assets.
“Given the recent and significant market interest in advanced lithium projects in Western Australia, and now that we have regained control of the assets, we will conduct a review of both lithium projects including the potential to seek expressions of interest from potential strategic investors,” Mr Clifford said.
“Overall, the resumption of 100 per cent control over these projects positions us favourably to add to shareholder value in 2024, and we look forward to providing a detailed update on our lithium business strategy, to ASX, in the near future.”
