MinRes and Lord Resources strike deal on Horse Rocks lithium venture

Leading diversified resources company Mineral Resources (ASX: MIN) has continued a busy expansion period with the signing of a farm-in agreement with Lord Resources (ASX: LRD) over the Horse Rocks lithium project.

Earlier this week, MinRes signed a binding heads of agreement with Poseidon Nickel (ASX: POS) to acquire the Lake Johnston nickel concentrator plant and tenure 400 kilometres east of Perth.

The key piece of infrastructure is being acquired to help consolidate Mineral Resources’ aims of establishing a third processing hub for the battery metal in the southern Goldfields region of Western Australia.

Horse Rocks farm-in

In its latest expansion move, MinRes and Lord Resources have entered into a binding farm-in agreement on the promising Horse Rocks lithium project 20km south of the famous Goldfields town of Coolgardie.

Horse Rocks is situated just 8km west of MinRes’ 66.1 million tonnes at 1.36% Mt Marion lithium mine.

The two companies have expressed interest in jointly developing the project, where previous exploration by Lord has identified multiple stacked lithium-caesium-tantalum pegmatite swarms displaying extensive fractionation.

Under the terms of the agreement, MinRes has the right to acquire an initial 40% interest in Horse Rocks by funding $1m of expenditure within 18 months.

It has a further option to increase its interest in the project through Stages 2 and 3 farm-in obligations.

Proposed joint venture

The two companies have agreed to create a joint venture in Stage 2, with MinRes having the option to earn a further 30% interest in the project by funding an additional $5m in expenditure within 36 months of the start of Stage 2.

MinRes can then earn a further 15% interest in the project in Stage 3 by funding expenditure through to a decision to mine.

Following the successful completion of the stage 3 earn-in, Lord then has an option to remain in the joint venture (JV) and contribute to all future costs, or to convert its JV interest to a 1.5% royalty.

Lord will manage the implementation of exploration and development activities through the farm-in stages.

It will also have access to geological expertise provided by MinRes to identify prospective mineral targets on the tenement, further enhancing the exploration process.

Lord reported in January that drilling had confirmed a swarm of stacked pegmatites at Horse Rocks extended over an area of at least 1,100m by 500m.