Mineral Resources and Reed Resources are considering floating a new lithium company to develop the Mt Marion project, approximately 40 kilometres south-west of Kalgoorlie-Boulder.
Reed and MinRes announced today the execution of a shareholders agreement, where MinRes will fund and operate the Mt Marion project in return for a 30 per cent stake in the project.
Reed released a pre-feasibility study for the Mt Marion project today, which flagged a $US83 million capital expenditure for the operation, with average costs of $US3,878 for each tonne of lithium hydroxide.
The study assumed a selling price of $US6,900/t for lithium hydroxide.
Reed and MinRes said their preferred financing strategy for Mt Marion would be an initial public offering, which would be launched following completion of a definitive feasibility study to construct a lithium battery materials plant.
The companies said discussions remained preliminary and there was no assurance a binding agreement would emerge.
Reed Resources shares last traded at 19 cents each, before entering a trading halt yesterday, while MinRes shares were up 4.8 per cent today, finishing trade at $8.71.
