SYDNEY: Lithium Australia (ASX:LIT) has announced that it has entered into a binding agreement with Charger Metals (ASX:CHR) to sell its remaining 30% interest in the Lake Johnston Lithium Project in Western Australia.
The project is a prospective lithium exploration asset that covers an area of 170 square kilometres.
Under the terms of the agreement, Charger Metals will pay Lithium Australia AS2.0m in cash, which includes a non-refundable exclusivity payment of AS0.15m. The completion of the transaction is subject to the approval of Charger Metals’ shareholders at a general meeting to be held in the near future.
As part of the deal, Lithium Australia will retain a first right of refusal for offtake for up to 30% of lithium produced by the Lake Johnston Lithium Project. This will enable Lithium Australia to secure a potential source of lithium for its future commercial production of lithium ferro phosphate (LFP), a type of battery material that offers high safety and long cycle life.
The sale of the Lake Johnston stake is in line with Lithium Australia’s strategy of focusing on its core assets and strengthening its balance sheet. Lithium Australia will continue to hold 9.6m ordinary shares in Charger Metals, representing a 7.5% interest in the company.