Chariot Corporation will take a 24.1 per cent stake in Mustang’s 10.1 million tonne lithium carbonate equivalent (LCE) Horizon resource after its subsidiaries repossess the Horizon and Halo lithium projects in USA.
Mustang’s wholly-owned subsidiaries are reclaiming full ownership of the Horizon and Halo lithium projects in Big Smoky Valley, Nevada.
As a result, Chariot’s latest investment adds an indirect exposure to the big claystone-hosted lithium projects held by the Mustang subsidiaries Horizon Lithium and Halo Lithium.
Importantly, in the case of the Horizon ground, Chariot gains an equivalent interest in a significant maiden lithium resource comprising an indicated 1.3 million tonnes LCE and an additional inferred 8.8 million tonnes LCE. The combined indicated and inferred LCE resources total 10.1 million tonnes.
The Horizon and Halo projects sit alongside American Lithium Corporation’s project which hosts a mineral resource estimate of 10.69 million tonnes LCE and American Battery Technology Company’s Tonopah Flats project with its mineral resource estimate of 18.63 million tonnes LCE.
The repossession by Mustang’s subsidiaries of 100 per cent unencumbered ownership of the projects arises from termination of their option agreements entered into with Pan American Energy Corporation (PAC) and POWR Lithium Corporation (PLC) on the Horizon and Halo lithium projects, respectively.
Both PAC and PLC have elected to no longer pay the maintenance fees to Nevada’s Bureau of Land Management (BLM) and will therefore surrender their respective interests in the Horizon and Halo tenure.
Following notification by PAC and PLC of their decisions not to extend the option agreements, Mustang embarked on a capital raise to assist its subsidiaries to pay the BLM fees by issuing convertible notes with an aggregate principal amount of US$250,000 (AU$367,750) at face value.
From the proceeds of the convertible notes, US$187,400 (AU$275,700) will be used by Mustang’s subsidiaries to pay the BLM maintenance fees and maintain their interests in the Horizon and Halo ground.
Chariot participated in the offer by investing US$60,198.92 (AU$88,550) in the convertible notes. On the assumption that all convertible note holders - including Chariot - convert their notes into Mustang equity, Chariot will maintain its current equity in Mustang of 24.1 per cent.
Notably, PAC had previously undertaken significant exploration at the Horizon lithium project, resulting in a maiden mineral resource estimate which it announced in November last year. That announcement was soon followed in a January public release of the company’s National Instrument (NI 43-101) technical report on the project.
PAC’s NI 43-101 technical report shows the Horizon indicated mineral resource estimate comprises 373 million tonnes of material grading 669ppm lithium for 249,000 tonnes of lithium metal, which converts to 1.3 million tonnes LCE.
The same report also shows the Horizon inferred mineral resource estimate comprises 2,454 million tonnes of material grading 680 ppm lithium for 1.67 million tonnes of lithium metal, which converts to 8.8 million tonnes LCE. The Horizon mineral resource estimate is valid as at 15 November 2023.
Horizon Lithium’s project consists of 839 mineral claims enclosing more than 17,334 acres (7015Ha) in the Big Smoky Valley in the Tonopah mining district in Nevada.Halo Lithium’s lithium project, also in the Tonopah district, covers 98 mineral claims which enclose more than 2024 acres (819Ha).
Following Mustang’s repossession of the Horizon and Halo ground, both PAC and PLC are required to deliver all of the information, records, data, samples and drill core relating to the two projects to Mustang’s subsidiaries, including that which relates specifically to PAC’s NI 43-101 technical report.
Both departing companies also have drill core from their respective drilling programs stored in Tonopah and Reno in Nevada, which Mustang has arranged to pick up and move to another storage location in Reno.
Mustang currently holds liquid assets amounting to about US$1.1 million (A$ 1,615,200) and working capital of US$85,000 (A$124,810).
The repossession of the two lithium deposits by Mustang, and Chariot’s near-25 per cent stake in Mustang adds another dimension to Chariot’s increasingly prospective US lithium exposure.
The company only recently announced some highly fractionated LCT pegmatites at its flagship Black Mountain project and appears set to continue driving hard in its US lithium exploration strategy.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Doug Bright
