LONDON: Alba Mineral Resources plc has announced the acquisition of an option to purchase a 50% stake in the Andover West Lithium Project, located in the lithium-rich region of West Pilbara, Western Australia.
The deal includes exploration licences E47-3373 and ELA47-4844, amid a surge of lithium exploration activity in the area.
Recent discoveries near the project site have revealed high-grade lithium intersections, bolstering the region’s reputation as a significant lithium reserve.
The Andover Project, adjacent to the newly optioned licences, is valued at A$1.7 billion following a takeover by Hancock Prospecting and SQM.
Western Australia is known for hosting some of the largest lithium mines globally, with reserves surpassing 500 million tonnes. The favourable geology within the optioned licences suggests a high potential for lithium, with similar mineralisation found in nearby projects.
Should Alba proceed with the option after due diligence, the company will issue GBP 250,000 worth of shares and 12-month share warrants to secure the 50% interest. A joint venture will be established for exploration, with Alba taking the lead in managing the project and setting budgets.
The agreement also grants Alba pre-emption and tag-along rights concerning any sale of the joint venture partner’s share of the lithium rights.
George Frangeskides, Alba’s Executive Chairman, commented:
“We are delighted to have secured an option to acquire a 50% interest in the Andover West Lithium Project in the West Pilbara, including management rights. Western Australia is home to some of the world’s biggest and best iron ore, gold and lithium deposits. The West Pilbara, where the Andover West Project is situated, has in recent years seen a surge in exploration for lithium, with the most notable success being the lithium discovery made by Azure Minerals on a neighbouring licence last year which has resulted in its imminent takeover for A$1.7 billion. High-grade lithium has also been found across a number of other neighbouring licence areas.
“While lithium prices have come off substantially in recent times as various global and macroeconomic factors have taken their effect, the underlying fundamentals remain very strong with a significant supply shortfall forecast by the end of the decade. As Andover West is not a near-term production asset, the current price of lithium is not hugely relevant to our decision to invest in this project. Indeed, the massive correction in lithium prices in recent times has only been to our advantage as we have been able to secure terms with the vendor which I do not think would have been conceivable 12 or 24 months ago. We take a medium to long-term view as we seek to build value for our shareholders.
“We now have a foothold in a world-class mining district to explore for a commodity that is absolutely fundamental to the global energy transition.”