Perth-based Latin Resources (ASX: LRS) has inked a deal with Argentinian investment group Integra Capital, which will see aggressive exploration work unleashed on the company’s Catamarca lithium pegmatite projects.
By spending US$1 million (A$1.4 million) on exploration and development, Integra will earn a 50% interest in the project.
The investment firm also has an option to take a 10% cornerstone stake in Latin Resources and become the junior’s largest corporate investor.
Integra is one of Argentina’s largest lithium explorers and holds a portfolio containing more than 400,000 hectares (4,000sq km) of lithium brine projects in the Jujuy and Catamarca provinces.
This deal with Latin Resources will be Integra’s move into the hard rock lithium sector and will make it a major player in the industry.
Latin Resources’ Catamarca projects extend over 700sq km and hold hard rock lithium pegmatite targets.
The company said the investment will allow the joint venture partners to begin an “aggressive” exploration campaign targeting a maiden JORC resource, followed by feasibility, metallurgy and engineering studies.
Latin to be free carried for initial exploration
The impact of the US$1 million investment is significant for Latin Resources which, at yesterday’s close, has a market capitalisation of $1.09 million.
Its ground will be transferred to a new jointly owned company to be incorporated in Argentina.
Latin Resources will now have a free-carried interest in the project’s initial stages. After Integra has spent the US$1 million, each party will be responsible for further spending on exploration, along with feasibility studies and related work.
Financing for the construction of the processing plant will be line with the two partners’ percentage ownership at that time.
Latin Resources managing director Chris Gale said the deal with Integra is an “excellent outcome” that places the company in a position to become a “significant” lithium player.
“Our projects have received widespread interest, but one major advantage Integra offers Latin is their proven in-country experience in Argentina with developing and operating on time and under budget,” he said.
Apart from lithium, Integra is involved in oil exploration and production, natural gas distribution, and electricity generation and distribution. It also provides multiple financial services in Argentina.
Past lithium mining at Catamarca
Latin Resources lodged its claims in May 2016 for what is now its Catamarca project, comprising seven exploration tenements.
Following extinction by the Mining Authority of Catamarca of several abandoned claims, the company applied for additional ground. Two areas, Vilisman and Ancasti, have seen past lithium mining activity and together host more than 20 lithium-bearing pegmatites documented over the past 50 years.
Latin Resources is also progressing its Ilo copper project in Peru in partnership with Vancouver-based First Quantum Minerals and has additional lithium ground in both Argentina and Brazil.
In addition, it is working on its Noombenberry halloysite kaolin project near Merredin, Western Australia.