Australian junior Caeneus joins Nevada lithium rush

PERTH (miningweekly.com) – ASX-listed Caeneus Minerals has ventured into lithium territory with the signing of a binding heads of agreement (HoA) with privately held Nevada Metals.

Under the HoA, announced on Wednesday, Caeneus would acquire all the issued shares of Nevada Metals, which owns two lithium projects in the US state of Nevada, where the $5-billion Tesla Motors Gigafactory is currently under construction.

Junior project developers are rushing to stake land claims in a bid to get in on the hype created by the factory, which is expected to create significant demand for lithium sources outside China.

Both projects were situated near the factory and Caeneus pointed out that Tesla Motors had indicated that it planned to source its raw material requirements exclusively from North America.

The Lida Valley brine lithium project, covering 2 620 acres, is situated about 40 km from the Silver Peak lithium mine of Albemarle – the only producing lithium mine in the US, and the Muddy Mountain project, covering 2 542 acres, is located about 50 km from Las Vegas. Caeneus stated that Muddy Mountain was potentially a “district-scale” lithium clay concept.

The projects are also in close proximity to other regional lithium explorers and developers in Nevada, such as TSX-V-listed firms Pure Energy Metals and Lithium-X.

In exchange for ownership of Nevada Metals, Caeneus would issue 600-million of its own shares, at a deemed issue price of 0.1c each, along with 300-million free attaching unlisted options, exerciseable at 0.3c each, by the end of December 2020.

The securities would be issued at the settlement of the transaction, which would be five business days from the receipt of shareholder approval.

In addition to the share and option issue, Caeneus would also be liable for a non-refundable cash payment of C$32 500 to DG Resources Management, in respect of Nevada Metals’ claims over the Lida Valley project, as well as the issue of 100-million shares within 30 days of the receipt of shareholder approval.

Another 100-million shares would be issued 12 months after shareholder approval, with a further 75-million due after 24 months. Caeneus would also grant DG Resources Management a 2% net smelter royalty on the revenue generated at Lida Valley.

At Muddy Mountain, Caeneus would be liable for a nonrefundable cash payment of C$37 500, which would be made five days after executing the HoA, and a further C$37 500 to be made within 14 days of shareholder approval.

Furthermore, the company would need to issue 125-million shares within 14 days of shareholder approval.

A cash payment of C$75 000 was also due within 12 months after the date of settlement, along with a further 125-million shares. A further 125-million shares would also be issued 24 months after the receipt of shareholder approval.

The company aimed to complete the transaction by late May.

Meanwhile, Caeneus reported that it had raised  A$482 645 to fund exploration programmes at the new lithium projects.

The company issued about 482-million shares, at 0.1c each, with a one-for-two free attaching unlisted option, exerciseable at 0.3c each on or before December 2020.

The shares were issued under the company’s current capacity, and as such did not require shareholder approval.