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LONDON (Alliance News) - Ariana Resources PLC Tuesday said its Australian subsidiary has signed a joint venture agreement to sell a package of tenements thought to contain lithium and tantalum mineralisation to Kingston Resources Ltd.
Ariana and its partner have decided to sell the tenements in return for equity stakes in Kingston in the hope that Kingston's exploration work on the areas sold will deliver some value that will benefit Ariana through its stake in the firm.
Ariana Resources owns an 86% stake in Asgard Metals Pty Ltd, which has signed the deal with Kingston as part of a broader deal involving Slipstream Resources Group, which is partnering Asgard on the tenements in question.
Asgard and Slipstream have agreed to sell a total of 20 tenements across four areas in Western Australia and the Northern Territory to Kingston in a cash and share deal.
Under the terms of the deal, Asgard will receive a AUD20,000 payment from Kingston, of which AUD8,000 will be paid in the next five days with the remainder being paid once the deal has been formally completed.
Asgard will also be issued with 6.6 million shares in Kingston and benefit from performance share payments.
If an inferred mineral resource of at least 5.0 million tonnes of ore graded at a minimum of 1.0% lithium is delivered by Kingston, then it will issue another 3.6 million shares in the company to Asgard.
If the inferred mineral resource exceeds 10.0 million tonnes at a grade of no less than 1.0% lithium then Asgard will be awarded another 3.6 million shares in Kingston.
Kingston plans to conduct a two-tranche placing to raise AUD6.9 million to conduct an "aggressive exploration programme" on the new tenements. The first tranche does not require approval and will raise AUD840,000 to allow work to start immediately whilst the second, larger tranche will need shareholder approval before being issued.
"We are again pleased to have been able to cooperate productively with Slipstream on this deal, and to have been able to apply again a successful formula to vend the complete licence package to
Kingston. We now look forward to seeing the formal completion of this deal and towards Kingston undertaking new exploration on this licence package," said Managing Director Kerim Sener.
Ariana shares were up 6.7% to 1.44 pence per share on Tuesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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