Dynamic Metals announces JV with MinRes to unlock lithium potential at Widgiemooltha
Junior explorer Dynamic Metals (ASX: DYM) has announced the creation of a farm-in and joint venture (JV) agreement with a wholly-owned subsidiary of Mineral Resources (ASX: MIN) (MinRes) to divest 40% of all lithium mineral rights on the Widgiemooltha project in Western Australia.
Under the terms of the unincorporated venture, Dynamic will hold 60% equity and be paid $5 million for the lithium rights.
Of this, $400,000 will be received immediately as a signing fee and a further $3.6m will be received in cash on completion, with a deferred payment of $1m in July 2025.
Dynamic will retain the rights to explore for other minerals including nickel and gold across all areas of the project.
MinRes options
As part of its involvement in the JV, MinRes will have the option to sole fund $15m of exploration expenditure over four years to increase its 40% stake to a total 65%.
On completion, MinRes may then elect to further increase its stake to 80% by sole funding exploration through to a decision to mine.
If MinRes achieves the maximum stake, Dynamic must elect to either remain in the JV and contribute to the costs or convert its interest into a royalty at a rate of 1.5% of free on board revenue payable on all lithium extracted and processed from Widgiemooltha.
Should Dynamic choose to convert, MinRes will assume 100% of the lithium rights and the joint venture will terminate.
Minerals potential
Dynamic managing director Karen Wellman said the lithium divestment would allow for a full assessment of Widgiemooltha’s minerals potential.
“Although we have had some encouraging results with our first pass exploration activities, the sheer size of the project means it would likely have taken Dynamic many years and considerable expenditure to assess its potential and realise value,” she said.
“MinRes is a leader in the Australian lithium sector with the technical and financial capabilities to do the project justice.”
Ms Wellman said Dynamic would use the initial consideration to advance the exploration of its new projects.
The JV deal is expected to be finalised by mid-year.