BMG Enters Joint Venture for Chilean Lithium Projects

BMG Resources (ASX:BMG) has entered into a binding agreement with the owners of Lithium Chile to explore and develop three potential lithium brine projects in Chile through a joint venture.

The three projects are located in the lithium triangle, an area in the Andes that encompasses parts of Northern Chile, Southwest Bolivia and Northwest Argentina. This area hosts over 50 percent of the world’s lithium resources, along with the largest and highest-grade lithium brine deposits in the world.

The three projects — Salar West, Pajonales and Natalie — span over 12,000 hectares, and Salar West will be the first priority in the companies’ exploration timeline. The goal of the joint venture over the next year is to complete initial drill programs and to establish JORC-compliant resources in the project areas.

As part of the joint venture’s initial consideration, BMG will pay Lithium Chile US$800,000; US$100,000 is to be paid within five days of the signing of a term sheet, followed by US$500,000 in cash and US$200,000 in shares after the transaction’s completion.

Lithium Chile will own “all right, title and interest” to the lithium properties, though BMG will acquire an initial 20-percent interest in Lithium Chile through the joint venture.

BMG will also provide up to US$2.5 million in funding and US$300,000 in shares to Lithium Chile for an additional 30-percent interest in the JV, making its total stake 50 percent.

In a statement, BMG Managing Director Bruce McCracken shared his excitement about the joint venture.

“BMG is excited to be partnering with [Lithium Chile] in the best Lithium province in the world,” he said. “The fundamentals for the lithium sector remain very positive with strong demand growth from battery requirements for electric vehicles, and there is no better entry point than the world’s highest grade, lowest cost brine deposits in Northern Chile.”

He added, “[w]e are working to fast track the establishment of the [joint venture] and progress the work program as quickly as possible.”

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.