Force Commodities (ASX: 4CE) has clinched a new lithium project close to AVZ Minerals’ Manono-Kitotolo lithium licences via a joint venture with VinMetals Group subsidiary Mining Mineral Resources.
After emerging from a trading halt this morning, Force reported it had executed a binding heads of agreement with Mining Mineral Resources to establish the Kanuka lithium project joint venture where Force will own a 51% interest.
The joint venture includes 194 square kilometres of prospective lithium bearing pegmatites and comprises an exploration licence and a mining licence about 20km from Force’s flagship Kitotolo asset in the Democratic Republic of Congo.
As part of the agreement, Force will issue A$200,000 shares to Mining Mineral Resources plus up to A$1 million in additional share once a JORC-compliant resource has been established of at least 1 million tonnes of contained lithium.
Also, Force will pay Mining Mineral Resources a 2.5% royalty on all lithium sales.
According to Force, pegmatite has been observed over about 3km of the joint venture area. Additionally, current and historic tin and tantalum mining at the project has exposed pegmatite at shallow depths.
Prior to the agreement, Force head of exploration James Sullivan undertook due diligence across Kanuka and recommended to the board the company negotiate a joint venture. Mr Sullivan’s due diligence included on ground reconnaissance and a small grab sampling program which returned lithium grading up to 2.12%.
Mining Mineral Resources operates a tin and tantalum operation across part of the joint venture licence area and exports the commodities to international markets.
Because of the established operation, the Kanuka lithium project has access to power, airstrip, a mine camp and offices. Force claims this existing infrastructure will aid in fast-tracking the project.
Once official, this latest joint venture will increase Force’s landholding in the region to more than 600 square kilometres.
To fund an “aggressive” exploration campaign at Kitotolo and Kanuka, Force has completed a A$3 million capital raising prior to the trading halt.
“This agreement and funding cements our strong position within a world class lithium region,” Force director Jason Brewer said.
He added the company now had the funding to pursue exploration and development.
Phase one exploration at Force’s recently acquired Kitotolo project is due to wind up mid-month, with phase two trenching work to begin early next year.
Force entered the DRC after officially committing to Kitotolo in early October after four weeks’ due diligence at the project. Due diligence at Kitotolo revealed “significant” and “widespread” visible spodumene and other lithium bearing minerals.
By early afternoon trade, Force’s share price had rocked 58% to sit A$0.079.