Latitude Consolidated (ASX: LCD) has inked a binding agreement to snap up a 70% interest in the Mbeta lithium project in southern Zimbabwe from Zimbabwean national Robert David Hutchings.
The project covers 18 square kilometres of mineral claims prospective for lithium and associated elements, with mineralised pegmatites and historic workings that extend over 700 metres.
Latitude said pegmatite bodies at the project extend for 6km through the permit area.
As part of the agreement, Latitude will pay the vendor a non-refundable deposit of US$50,000. An extra US$50,000 will be paid once the project licence has been transferred.
Latitude will also issue the owner and its nominees 6 million shares and fund the project through to the completion of a definitive feasibility study.
The project will be operated via a joint venture vehicle with Latitude owning 70% and the vendor retaining the other 30%.
Placement to fund acquisition and exploration
Latitude will fund the Mbeta acquisition via a A$3.45 million share placement, which will be undertaken in two tranches.
An initial tranche of A$491,0000 is due upfront under a 15% capacity, while a second, A$2.95 million tranche is due after shareholders approve the DJ Carmichael-managed placement to sophisticated investors.
Under the placement, Latitude will issue a total of 138 million shares at A$0.025 a share.
Latitude, which held $407,257 on December 31, is expecting to receive A$600,000 in cash and A$1 million in equity from Alt Resources by April 30 on completion of the sale of Latitude’s Mt Ida gold project.
Funds from the placement will go toward Mbeta acquisition costs and early exploration activity.
Latitude chairman Tim Moore said the company planned to decide upon drill targets for follow-up testing in the near term.
“Our technical team has identified considerable exploration potential within the Mbeta project and surrounding mining claims which we believe have the potential to host additional lithium mineralisation. It is our intention to undertake data compilation of past work, followed by a field exploration program to accurately assess the extensive strike and in-pit targets located on the property,” he said.
Mbeta acquisition strategy
Mr Moore said the transaction tied into the company’s strategy to invest in the renewable energy space.
“The board has been actively assessing a number of investment opportunities in the resources sector globally with the aim of providing our shareholder base with a direct exposure to the rapidly growing renewable energy sector,” he said.
Lithium is used in rechargeable batteries, in addition to other uses such as in aircraft manufacturing or mood-stabilising pharmaceutical drugs.
The company’s plans to look for more battery metal projects in Africa as part of its corporate strategy.
Western Australia projects
Latitude currently has an exploration licence application pending for the Gecko North gold project about 35km from the Goldfields town of Coolgardie.
The 206sq km site is located near Beacon Minerals’ 156,000 ounce gold resource, and immediately north of Golden Eagle Mining’s Gecko project, which has indicated and inferred mineral resource of 2.7 million tonnes at 1.7 grams per tonne gold for 145,000oz.
The Gecko North site features several prospective paleochannel targets that Latitude plans to follow up once a tenement is granted.
Latitude’s securities were 2.78% down to $A0.001 by late afternoon.