TIDMATN
RNS Number : 8143H
Aterian PLC
01 August 2023
01 August 2023
Lithium Joint Venture with Rio Tinto in Rwanda
Aterian Plc
("Aterian" or the "Company")
Aterian Plc (LSE: ATN), the exploration and development company
advancing its portfolio of African-focused critical and strategic
metal assets, announces that it has signed a definitive Earn-In
Investment and Joint Venture Agreement ( " Agreement") with Rio
Tinto Mining and Exploration Ltd ( " RIO" ) and Kinunga Mining Ltd
( " Kinunga") . The Agreement is for the exploration and
development of lithium and by-products at its HCK Joint Venture
project ( " Project " ) holding the HCK licence (the "Licence") in
the Republic of Rwanda.
Highlights:
-- RIO has the option to invest US$7.5 million in two stages to
earn up to a 75% interest in the Licence to explore for minerals
vital for a successful energy transition to renewable energy.
o Stage 1 exploration expenditures of US$3 million over a period
of up to two years to earn a 51% interest in the Licence.
o Stage 2 exploration expenditures of US$4.5 million over a
follow-on period of up to three years to earn a further 24%
interest in the Licence, taking RIO's interest in the Licence to
75%.
-- Cash consideration of US$300,000 over the two stages.
-- A 2% capped Net smelter return ("NSR") granted over the Project (capped at US$50 million).
-- RIO has the option to add Aterian's two other Rwandan
projects, pending licence approval with the authorities.
-- The Project has 19 identified pegmatite zones over its
2,750-hectare Licence in southern Rwanda.
-- Project located close to good infrastructure, including national highways, power and water.
Charles Bray, Chairman of Aterian, commented:
"This is a transformative deal for Aterian and highlights our
ability to identify potential world-class deposits in critical
minerals such as lithium. We have identified 19 separate LCT
(lithium-caesium-tantalum) pegmatite zones across the 2,750-hectare
project offering the prospective scale necessary to attract such a
major partner as Rio Tinto.
I am very proud of the Aterian team and their work to identify
and unlock strategic mineral assets in Africa and to make this
transaction possible. I would like to thank Rio Tinto for their
time working with us to enable this investment in the significant
lithium potential in Rwanda. I am also grateful for the support
from our partner, HCK Mining Company Limited and for the continued
partnership with the Rwanda Mines, Petroleum and Gas Board who have
been crucial to completing the transaction. We believe this
investment highlights the opportunity and transformational
potential of the Rwanda mining sector.
Lithium is a key commodity for global electrification ambitions,
as it is the central chemical element of dominant battery
chemistries. Benchmark Minerals Intelligence forecasts that in 2023
lithium demand will reach 900,000 tonnes, a jump of 27%
year-over-year and further forecast to reach 1.5 million tonnes in
2026.
The Agreement with Rio delivers material value to Aterian
shareholders endorsing Aterian's capital efficient business model
as well as demonstrating the potential of Rwanda as a mining
jurisdiction. The Agreement is subject to conditions, including the
addition of lithium as an exploration commodity on the licence,
which is expected in due course.
While we focus on working closely with Rio Tinto and our Rwandan
stakeholders to ensure the success of this project, we will also
look to replicate the capital efficient exploration and development
business model in our other project concessions in Rwanda and
Morocco."
Key Terms of the Agreement
RIO has the option to incur work expenditure of US$3 million
over a two-year period ("Stage 1") to earn an initial 51% interest
in the Licence. RIO will also make cash payments to Aterian,
totalling US$300,000, to reimburse previous operational expenses
incurred by Aterian. An initial payment of US$200,000 is due upon
completion of satisfactory due diligence by RIO, and an additional
payment of US$100,000 will be due at the start of Stage 2.
Upon earning a 51% interest in the Licence, RIO can earn an
additional 24% interest in the Licence by funding additional work
expenditures of US$4.5 million over a three-year period ("Stage
2"). After Stage 2 RIO will, provided it contributes the additional
funding, hold a 75% interest in the Licence.
RIO has agreed to a 2% NSR over the project with a US$50.0m cap
that will be due by the future Joint Venture between RIO and
Kinunga to a holder/holders to be notified by Aterian to RIO prior
to the NSR agreement being entered into and such holder/holders to
be subject to completion of satisfactory due diligence by RIO.
Under the terms of the Agreement, RIO has an exclusivity option
to invest into Aterian's two other existing Rwandan projects, which
will be subject to their own separate agreements. A management
committee comprising representatives of both RIO and Aterian will
be formed to provide financial and operational oversight. RIO will
act as the operator for the Project.
The HCK Project
Aterian has a Joint Venture Agreement and Operating Agreement
with HCK Mining Company Limited, a private non-related Rwandan
registered entity over a 2,750-hectare exploration licence in
southern Rwanda. Aterian holds a 70% interest in Kinunga Mining
Limited, which holds the licence for the Project, with HCK Mining
Company Limited holding a 30% interest. The licence is located
approximately 65 km southwest of Kigali and 20 km northwest of
Huye, within the Southern Province, straddling the Nyanza and Huye
District boundaries.
The HCK licence is underlain by schists and minor intrusive
bodies of the Palaeoproterozoic granitic-metamorphic Butare
Complex, lying to the west of the Gitarama granitic massif. The
Complex is surrounded by low-grade metasedimentary terrains and is
bordered to the north by a significant NW-SE left-lateral shear
zone, the Mwogo Structure. Prospecting has identified 19 zones of
potentially rare metal hosting pegmatite, frequently with multiple
pegmatite dykes observed at most locations.
Recent work has focused on the HCK-1 prospect, which follows a
prominent northwest-trending ridgeline. Field observations indicate
that the strike of the HCK-1 target zone extends for at least 2,500
m. The width of the target zone is uncertain, but in several
locations along exploration pit section profiles, pegmatite is
intersected over a horizontal distance of c.100 m.
A positive outcome from the exploration pitting is that 800 m of
the identified pegmatite strike continuation occurs in a
"greenfield" environment to the southeast of the main ridgeline
hosting HCK-1. This can be described simply as an area without
observed artisanal workings, pegmatite outcrop, or surface
expressions. The pegmatite bodies discovered during the pitting
remain blind to the surface covered by soil and regolith of
variable thickness up to 4.50 m. A drone survey has been flown over
HCK-1, covering an area of 360 hectares, to provide detailed
imagery with topographic data and a current view of the earlier
artisanal workings.
In Q1 2023, a ground-based multi-method geophysical survey was
undertaken over the HCK-1 target. The survey, comprising
magnetometry, induced polarisation ("IP"), and electrical IP
tomography, was designed to provide information on the main
geological controlling structures for the emplacement of the
pegmatite bodies, the depth of weathering and recommended targets
for detailed follow-up. This work identified four sub-cropping
pegmatite bodies and highlighted the strong structural control on
pegmatite emplacement with at least three deformation events
interpreted.
An independent geochemical study of weathered surface samples
collected over the HCK-1 pegmatite shows encouraging evidence for
lithium-tantalum enrichment. Given the deep tropical weathering,
the enrichment of lithium (16 samples > 150 ppm) is seen as
encouraging for locating lithium pegmatites at depth (below the
weathering zone). The indicated presence of tourmaline and beryl
from several localised zones along the strike of the HCK-1
pegmatite may imply internal zonation and/ or that the bedrock
source pegmatite comprises more 'complex' pegmatites (which are
generally the targets in LCT pegmatite exploration). The low
rubidium levels associated with anomalous lithium may imply a
non-mica lithium source and the low levels of phosphorus vector
toward a more spodumene-rich bedrock target.
Aterian Plc:
Charles Bray, Executive Chairman -
charles.bray@aterianplc.com
Simon Rollason, Director - simon.rollason@aterianplc.com
Financial Adviser and Broker:
Novum Securities Limited
David Coffman / George Duxberry
Colin Rowbury
Tel: +44 (0)207 399 9400
Financial PR:
Bald Voodoo - ben@baldvoodoo.com
Ben Kilbey
Tel: +44 (0) 7811 209 344
Notes to Editors:
About Aterian plc
www.aterianplc.com
Aterian plc is an exploration, trading, and development company
with a diversified portfolio in Africa of critical and strategic
metals projects.
Aterian plc seeks to acquire and develop new critical and
strategic metal resources to strengthen its existing asset base
whilst supporting ethical and sustainable supply chains. The supply
of these metals is vital for developing the renewable energy,
automotive, and electronic manufacturing sectors, which are playing
an increasing role in reducing carbon emissions and meeting climate
ambitions globally.
The Company currently has three partnerships in Rwanda,
exploring and developing small-scale tantalum-niobium-tin mining
opportunities and recently acquired Aterian Resources Ltd, which
owns a portfolio of 15 copper and silver projects with a project
area of 762 km (2) in the Kingdom of Morocco.
The Company is launching a new OECD-compliant metals concentrate
trading business in Rwanda via its 100% owned subsidiary Eastinco
Ltd.
The Company's strategy is to seek new exploration and production
opportunities across the African continent and to develop new
sources of strategic and critical mineral assets for exploration,
development, and trading.
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