GreenTech Metals has joined forces with Artemis Resources to create a monster 420-square-kilometre lithium exploration play in the highly prospective West Pilbara region of Western Australia.
The companies will merge their lithium exploration assets into a single newly formed joint venture, Andover Lithium, which will create the largest lithium exploration tenement packages in the area.
The move should improve the new joint venture’s chances of bringing in a major funding partner attracted to the landholding’s scale.
Each company will hold an equal 50 per cent stake in the partnership.
The enlarged tenement area lies along the highly mineralised Karratha-Roebourne lithium corridor. The region has garnered significant attention recently due to the discovery of Azure Minerals' eye-popping Tier 1 Andover lithium deposit, which hosts a massive high grade exploration target of up to 240 million tonnes grading 1.5 per cent lithium oxide.
Andover Lithium’s grounds include six key areas identified for their lithium potential. Four areas are known to contain significant outcrops of spodumene-bearing pegmatite, which is an indicator of high-grade lithium mineralisation.
GreenTech says the consolidation of its lithium assets has freed up valuable time and resources allowing the company to focus on its flagship Whundo copper and zinc volcanogenic massive sulphide project. Likewise, Artemis can push on with exploration at its Carlow gold project.
The decision to form Andover Lithium seems a savvy move by the partners. By streamlining exploration costs tied to their lithium tenements during the current downturn in metal prices, the duo can preserve capital while remaining strategically positioned.
When the global demand cycle returns – which some pundits see as inevitable - the joint venture will be perfectly positioned to maximise a return, driven by an accelerating global push towards the green energy transition.
The merger deal also comes hot on the heels of GreenTech’s decision last week to sell some non-core tenements to ASX-listed explorer Errawarra Resources for $100,000 and a $2M performance fee based on a future decision to mine.
GreenTech is rationalising a busy exploration schedule to concentrate exploration efforts at its nearby Whundo copper project, which already hosts a 6.5MT resource grading 1.12 per cent copper. A diamond drill program recently jagged a 10-metre and 7.23m sections of massive sulphides.
Visual inspection of the core suggests the sample could contain as much as 30 per cent chalcopyrite ore, which is also known as copper sulphide.
GreenTech says the results confirm the down-plunge extension of the mineralised lodes at Whundo, smashing backroom chat that its resource was already capped.
With assays pending and a down hole electromagnetic survey imminent, the company will be keen to crunch the numbers in efforts to eventually prove the doomsayers wrong and deliver a resource upgrade at the project.
The merger deal also comes at an interesting time in the lithium market cycle. Housing a massive 420 square kilometres of highly prospective lithium leases in a single-commodity vehicle ahead of the next cycle run gives the partners plenty of optionality.
Either the landholding becomes enticing enough for a lithium major to come knocking, or when the market recovers the joint venture could be spun out into a separate high-octane lithium listing. At the very least the two companies can remain well placed for upside opportunities.
As the old saying goes: There’s always safety in numbers.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By James Pearson
