Western Areas (ASX:WSA) has announced the completion of a farm-in and joint venture agreement with Kidman Resources for lithium and lithium-by product rights over Western Areas’ northern Forrestania tenements.
As quoted in the press release:
Key Agreement Terms
- Western Areas to receive 6,318,044 ordinary shares in Kidman, escrowed for six months;
- Western Areas will become a substantial shareholder of Kidman at 5.2% (including the previous share issue for the tenement sale announced 28 February 2017);
- Kidman to earn-in on the following basis;
- Stage 1 – Kidman can earn 50% by spending A$5.0m over three years with a minimum of A$1.5m being spent in the first twelve months;
- Stage 1 – at the end of Stage 1, Western Areas has the right to co-contribute with further exploration expenditure on a 50:50 basis with Kidman;
- Stage 2 – Where Western Areas elects not to co-contribute at the end of Stage 1, Kidman may elect to spend a further A$4.0m over two years to earn 70%; and
- Western Areas is free carried to a decision to mine should Stage 2 be completed
- All non-lithium rights over the tenements retained by Western Areas; and
- Western Areas has the right to appoint a non-executive director to the Kidman board within 3 months from the date of the Agreement.
Western Areas Managing Director, Dan Lougher, said that the Agreement was a logical outcome for the Company following the sale of two tenements to Kidman late last month.
“This is another excellent outcome for Western Areas as it allows the Company to realise early value for lithium prospectivity from our northern tenements at Forrestania, whilst providing free carried exposure to any exploration success. With a significant ownership interest in Kidman, now over 5%, Western Areas will keenly follow progress on Kidman’s development plans for the Earl Grey deposit.”