Charger Metals NL witnessed a substantial drop in its share price on the ASX today following the finalization of a significant agreement with Rio Tinto Exploration (RTX) concerning the Lake Johnston Lithium Project. This development follows Charger’s recent acquisition of full ownership of the project from Lithium Australia Ltd for $2 million.
In the terms of the agreement, RTX secures the right to earn up to a 75% stake in the Lake Johnston Lithium Project. RTX initiates the deal with an initial payment of $500,000 to Charger and a commitment of $1.2 million in pre-farm-in activities. Additionally, RTX is obligated to invest a minimum of $3 million in exploration within one year. To secure a 51% majority share, RTX must fund an additional $10 million in exploration and make an additional payment of $1.5 million to Charger. To attain a dominant 75% interest, RTX must either invest an extra $30 million or complete a Definitive Feasibility Study (DFS).
Despite the downturn in Charger Metals’ stock, the company’s managing director, Aidan Platel, expressed support for the agreement. He emphasized its potential for extensive exploration and development, particularly focusing on key prospects like Medcalf Spodumene.
The broader Australian lithium market is experiencing heightened activity, with companies such as Flynn Gold and Morella Corporation reporting positive developments in their respective projects. Today’s sector movements include a notable spike in performance by TG Metals. Rio Tinto’s strategic investments in lithium, evident through partnerships and acquisitions like the farm-in agreement with Charger Metals and the acquisition of tenement rights from Essential Metals Ltd (ESS), highlight the intensifying competition for lithium resources in Western Australia’s Apple Isle.