How will Charger Metals utilize the investment from Rio Tinto to advance the Lake Johnston Lithium Project? Lithium Australia Limited

L Lykeshares 2y Staff

How will Charger Metals utilize the investment from Rio Tinto to advance the Lake Johnston Lithium Project?

Rio Tinto and Charger Metals sign Farm-in Agreement for the Lake Johnston Lithium Project

Charger Metal's Acquisition and RTX's Investment Signal Exciting Prospects for the Lake Johnston Lithium Project

In a groundbreaking move, Charger Metals NL (ASX: CHR) has entered into a binding farm-in agreement with Rio Tinto Exploration Pty Ltd (RTX), a subsidiary of Rio Tinto Limited (ASX: RIO), for the Lake Johnston Lithium Project. Concurrently, Charger has also reached an agreement with Lithium Australia Limited (ASX: LIT) to acquire their minority interest in the project. These developments solidify Charger's position as the sole owner of the Lake Johnston Lithium Project, setting the stage for extensive exploration and potential significant lithium deposits.

A Win-Win Situation for Charger and Rio Tinto

Under the agreement, RTX will pay Charger $500,000 and invest $1. 2 million prior to the commencement of the farm-in. Additionally, RTX commits to spending a minimum of $3 million on exploration expenditure within the first 12 months. This bold move by RTX demonstrates the company's confidence in the project's potential.

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In return, RTX has the opportunity to earn a 51% interest by solely funding $10 million in exploration expenditure and paying Charger a minimum of $1. 5 million in cash. If they choose to further invest, RTX could secure a 75% interest by solely funding $40 million in exploration expenditure or completing a Definitive Feasibility Study.

The Significance of the Lake Johnston Lithium Project

The farm-in agreement solidifies the prospectivity of the Lake Johnston Lithium Project and underscores its potential to host a large-scale lithium deposit. Charger's Managing Director, Aidan Platel, expressed his enthusiasm, stating, "The planned significant investment by RTX will allow thorough systematic exploration over all of the project tenure, with initial exploration focused on fast-tracking the Medcalf Spodumene Prospect as well as progressing the Mt Day and Mt Gordon lithium prospects. "

Potential for a Prominent Lithium Province

Charger's Chairman, Adrian Griffin, highlights the transformative potential of the Lake Johnston Lithium Project, stating, "The largely unexplored Lake Johnston Greenstone belt now hosts multiple spodumene discoveries and with the recent focus and increasing exploration activity could evolve into a prominent lithium province. " The agreement with RTX positions the project for extensive exploration and development, laying the foundation for potential future success.

The signing of this farm-in agreement between Charger Metals and Rio Tinto Exploration paves the way for exciting developments in the Lake Johnston Lithium Project. With Charger's acquisition of a 100% beneficial ownership and RTX's substantial investment, the project's potential is being fully realized. As exploration efforts intensify in the largely unexplored Lake Johnston Greenstone belt, the dream of a prominent lithium province may become a reality. The future is bright for the Lake Johnston Lithium Project, and industry stakeholders eagerly anticipate the results of this groundbreaking partnership.

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