Lepidico seeks lithium on Venus ground
Venus Metals has reached a deal with fellow ASX listed company Lepidico that could lead to the discovery of lithium mineralisation at its Youanmi project in Western Australia’s Murchison District.
Lepidico owns some technology known as the “L-Max” metallurgical process that has successfully produced lithium carbonate from lithium-rich mica mineralisation including lepidolite and zinnwaldite which typically exhibit lower lithium grades than spodumene.
Under the option agreement, Venus will receive $50,000 cash and $120,000 in Lepidico shares in exchange for Lepidico earning a 12 month option to explore for lithium on the E57/983 exploration licence.
While exploration on the tenement has been focused on gold and vanadium, historical reconnaissance mapping has noted the presence of outcropping and sub-cropping pegmatites carrying notable lepidolite mineralisation.
During the option period, the two companies will negotiate the terms of a farm-in and joint venture agreement.
Under the indicative terms of the joint venture, Venus will receive $350,000 in cash and Lepidico scrip.
Lepidico will in turn have a 4-year period to complete a full Feasibility Study leading to a Decision to Mine to earn an 80% interest in the lithium rights.
Venus’s 20% stake will be free-carried to a decision to mine and the company will even be carried through project finance, with cost of finance to be repaid from Venus’ share of production.
Venus will also receive a benefit linked to the price of lithium carbonate equivalent received by Lepidico on the sale of L-Max processed products from material sourced from the rights.
Lepidico will earn a 51% interest in the rights if it spends $2m on project expenditure at any time during the 4 year period.
This agreement gives Venus a guaranteed path to market for its share of any lithium concentrate produced should Lepidico’s exploration be successful.
Venus recently increased the gold inventory at its flagship Youanmi project to nearly 1.2 million ounces by providing an updated JORC 2012-compliant mineral resource for all remnant, near-surface oxide deposits.
This provides the company with the opportunity to join several surface deposits into one impressive “super pit” at Youanmi, a scenario that was not considered economic in the past due to the depressed gold price.
Youanmi is located 480km northeast of Perth in the Murchison region of W.A and was closed down many years ago due to the lower gold price.
The mine achieved historical production of 667,000 ounces of gold grading 5.42g/t gold from open pit and underground mining operations that occurred between 1908 up until mine closure in 1997.
Venus has entered into two option agreements to enable it to purchase the mine, all associated mine infrastructure and the mine village on site.
Last week, the company managed to double the in-situ vanadium grade at Youanmi from 0.71% up to 1.46% simply by crushing the ore from historical drill core samples and then magnetically separating it.
It also tested oxidised surface samples and was successful in upgrading these from 0.67% in-situ to a best result of 1.37% vanadium pentoxide.
The Youanmi vanadium project has a JORC Inferred mineral resource of 167.7 million tonnes grading 0.41% vanadium pentoxide, 7.52% titanium dioxide and 24.6% iron, for a vanadium pentoxide resource of 683,000 tonnes.
This compares favourably with the nearby world-class Windimurra vanadium mine owned by Atlantic Vanadium that has a remnant mineral resource of 235 million tonnes grading 0.49% vanadium pentoxide.
With the Lepidico deal, Venus has now mapped out a development pathway for another major mineral resource at Youanmi that allows it to maintain substantial exposure to any development with minimal risk.
Venus Metals Corporation (VMC)
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