QXR Signs Formal Documentation To Acquire 75% Interest In 100km2 Liberty Lithium Brine Project USA

QX Resources Limited (ASX:QXR) has entered an Option to Purchase Agreement and an Operating Agreement (Agreements) to earn a 75% interest of the 102km2 Liberty Lithium brine project in California, USA (Project), from vendor IG Lithium LLC (IGL). The Agreements complement the acquisition agreement announced to ASX on 28 September 2023 under which QXR acquired a small package of adjacent claims.

• QXR has entered into a binding Option to Purchase Agreement to earn 75% of the Liberty Lithium Brine Project in the western USA.
  
• Liberty Lithium is one of the largest single lithium brine projects in the USA with contiguous claims over 10,230 Ha (102km2). An extensive lithium brine surface anomaly with elevated lithium results up to 215mg/L Li extends over 10km with geophysics indicating brine aquifer targets at depth.
  
• QXR to undertake drilling over the surface anomaly within two months to define potential lithium bearing aquifers at depth with brine sent for testwork to various Direct Lithium Extraction providers.
• QXR and the vendors have an indicative development plan and timeline considered achievable in discussions with regulators and local administrators due to the support for battery minerals production.

The project has been pursued by other groups due to its similarities to Albemarle’s nearby producing Silver Peak lithium brine deposit in Clayton Valley USA and to major Argentina brine projects. The vendors wanted QXR due to its past lithium brine experience.

End-users, DLE technology providers, project developers and battery makers have intimated interest in participating with us once we identify lithium brines in drillhole. The project is located near long life evaporation operations, and is well-serviced by roads and power in a region keen to be part of the energy transition.

QXR now has a battery minerals portfolio of true scale in Tier-1 jurisdictions. Exciting hard rock lithium targets, a major investment in high grade nickel-copper-cobalt sulphides, and now a large lithium brine project.”

The first stage of the Agreements involve QXR conducting drilling, sampling, and testwork, starting with two permitted drillholes in the main part of the surface lithium anomaly, scheduled for November-December this year. Large volumes of lithium brines, if encountered, will be submitted for testwork with various direct lithium extraction (DLE) providers. IGL is able to provide an experienced team to assist in the field work, rather than requiring QXR to assemble a team.

QXR will make staged option payments to IGL totalling US$2 million over the next 27 months to earn 75% of the Project and sole fund activities through to the Definitive Feasibility Study stage. Drilling is planned to assess the Project before the bulk of the payments are due.

Liberty Lithium Brine Project

The Liberty Lithium Brine Project, located in SaltFire Flat, California, is made up of 1,265 contiguous claims over 102km2 (25,300 acres), being one of the largest single lithium brine projects in the USA (for scale, equivalent to 2x area of Sydney Harbour or half the size of San Francisco city). An extensive lithium brine surface anomaly with elevated lithium results up to 215mg/L Li extends over 10km (ASX announcement 26 July 2023). Geophysical analysis shows a large basin over 1,000 metres deep and indicating brine aquifer targets at depth. The Project’s geological setting mirrors Albemarle’s nearby producing Silver Peak lithium brine deposit in Clayton Valley USA 1 and major Argentina brine projects.

Detailed due diligence, together with legal advice, have reaffirmed the local county and regulatory interest in developing projects such as Liberty Lithium towards production because of the support for battery minerals production in this part of California. Evaporative salt operations nearby have been operating for decades.

Purchase of Adjacent Third Party Claims

A small package of adjacent claims central to the Liberty Lithium Brine Project have been purchased from a third party by QXR 100% to consolidate title. Payments of US$100,000 and QXR shares to the same value (4,824,720 QXR shares priced at 3.24c and 3.1c per share) have been paid under the sale and purchase agreement (ASX announcement 28 September 2023).

Next Steps

QXR is organising a diamond drill program with two permitted drillholes planned (1,000m), together with downhole sampling and geophysics, targeted at the centre of the surface lithium anomaly. Drilling will take place in November- December, with final timing being subject to rig availability. Bulk volumes of lithium brines will be submitted for testwork with various DLE providers. The aim is to identify lithium bearing brine aquifers at depth, which is anticipated to lead to detailed drilling towards an initial resource by mid 2024.

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