Mining firm signs partnership deal with Australian lithium producer

Hey there, time traveller!
This article was published 29/09/2021 (1220 days ago), so information in it may no longer be current.

A junior mining company with one of the largest stakes of lithium properties in the province has signed a partnership deal with a major Australian lithium producer that could see it invest at least $4 million in the province over the course of the next three and a half years.

New Age Metals Inc., based out of Rockport, Ont., has entered into an agreement with Mineral Resources Limited (MRL), the fifth-largest lithium producer in the world, that will kick start exploration drilling in the next couple of weeks.

The terms of the agreement are such that if MRL pursues drilling and other development work on New Age’s properties in Manitoba, it could earn up to a 75 per cent equity interest in the properties.

Lithium is a critical component of most modern batteries and with the almost across-the-board commitment from automakers to convert their production lines to electric, it will be a critical piece of the policy puzzle to help lower reliance on fossil fuels for energy. Just this week, Ford announced it was building three electric vehicle battery plants. Ford was the last of the major auto companies to formally announce their commitment to shift to electric vehicles.

Harry Barr, New Age Metals’ CEO, said the deal is “Good news for the company, good news for Manitoba.”

He said the arrangement between a major producing mining company like MRL and a junior exploration company like New Age is the first to happen in the Canadian market for some time.

New Age has been acquiring exploration properties in Manitoba since 2016 and now has seven properties. It already has drilling permits for two of the properties and is in the process of acquiring a third one.

The deal gives MRL the right to receive 51 per cent of the equity in New Age’s Manitoba lithium properties if it spends $4 million on exploration over the next 42 months and contributes $400,000 in cash to New Age.

New Age has another project in Ontario, related to a platinum metals, which requires most of its resources and has been looking for a partner to fund exploration in Manitoba. New Age will continue to be the field manager on the drilling work MRL will be funding.

Lithium prices have soared up 30 to 40 per cent recently, but its exploration and production in North America has been modest. There are no lithium mines in the country although there is one nearing production stage in Quebec.

“North America, for whatever reason, has been slow to develop its lithium projects,” said Barr. “That’s why we have been able to get in and get such a good land position in Manitoba. To me and most in the industry, it is an under explored mineral in Manitoba.”

New Age’s properties are close to the Tanco Mine, about 20 kilometres northeast of Lac du Bonnet. That property, which has been producing cesium since 1969, mines the same type of mineral that holds lithium.

martin.cash@freepress.mb.ca