Lithium hopeful Galaxy Resources has signed a $1.1 million joint venture deal with General Mining Corporation over its Shoemaker hematite iron ore project just north of Wiluna.
Lithium hopeful Galaxy Resources has signed a $1.1 million joint venture deal with General Mining Corporation over its Shoemaker hematite iron ore project just north of Wiluna.
The deal allows Galaxy to focus on its $68 million Mt Cattlin lithium project near Ravensthorpe.
Under the sale and JV agreement, unlisted company General Mining Corp will acquire a 50 per cent interest after paying $100,000 in cash and issuing $1 million in shares.
Galaxy will also receive one option for every two shares issued.
The deal is subject to General Mining Corp successfully listing on the local stock market or the completion of a capital raising of at least $3 million.
General Mining Corp can also earn a further 30 per cent by spending $10 million on the project within two years.
Galaxy is free carried from all expenditure until the completion of a bankable feasibility study.
The announcement is below:
Emerging lithium producer, Galaxy Resources Limited (ASX: GXY) today announced it has signed a sale and joint venture (SJV) agreement with General Mining Corporation Limited (GMC) for the exploration and development of the Shoemaker hematite iron ore project.
Managing Director, Iggy Tan said given that Galaxy's prime focus is the development of the Mt Cattlin lithium project, the proposed sale and joint venture of Shoemaker is an excellent way of developing the project and maintaining an upside.
"This is a great deal for Galaxy and allows us to maintain an interest in the project without diverting attention away from the development of Mt Cattlin which is our core focus," said Mr Tan.
"We believe the Shoemaker project has a good potential for an economic iron ore deposit."
The Shoemaker project is located about 100 km north of Wiluna, Western Australia. In August 2008, Galaxy announced the results of a gravity survey and rock chip sampling of hematite iron mineralisation. Assay results of the rock chip sampling confirmed the presence of high grade hematite iron mineralisation at the project.
GMC will acquire a 50% interest in the Shoemaker project by payment of the following consideration on the date of completion:
1. $100,000 cash payment;
2. $1 million of Ordinary Shares in GMC to Galaxy; and
3. One (1) Option for every two (2) Ordinary Shares issued to Galaxy under (2) above, with an exercise date of 3 years from the date of issue.
The agreement is subject to the successful listing of GMC on the Australian Securities Exchange or completion of corresponding capital raising of at least $3 million.
The SJV also allows GMC to earn a further 30% by expenditure of $1 million on the Shoemaker project within 2 years of the date of completion. Galaxy is free carried from all expenditure for the project to the completion of a Bankable Feasibility Study and has a right to appoint a nominee Director to the Board of GMC.
