Atlas Iron has entered agreements with Pilbara Minerals over two lithium projects in Western Australia’s Pilbara region.
Pilbara Minerals has agreed to farm in to Atlas’ Cisco lithium prospect, which has been found to contain significant resources of the mineral.
Under the agreement, Pilbara will purchase a 51 per cent interest in the prospect for $2.3 million and could spend an additional $1 million on exploration over the first year to raise its interest to 70 per cent.
Both companies have also entered a memorandum of understanding (MoU), whereby Atlas will provide logistics services – including haulage, crushing and port services – to Pilbara to export direct shipping spodumene ore from its Pilgangoora lithium project.
Earlier this year, Pilbara also signed an offtake agreement with Chinese lithium producer Shandong Ruifu to supply 1.9 million tonnes of direct shipping spodumene ore by July 2017.
Atlas Iron managing director Cliff Lawrenson said, “This agreement gives Atlas the opportunity to realise the value of Cisco using Pilbara’s lithium expertise and investment and a farm-in model which frees Atlas of any expense until a decision to mine.”
“At the same time, we can generate additional revenue by providing a logistics service to Pilbara which leverages our existing operations and skills, developed over a decade of work in the Pilbara region.”
Pilbara Minerals recently received the first of two major environmental approvals from the WA Department of Minerals and Petroleum, for the Pilgangoora project; receiving a permit to clear native vegetation.
Pilbara aims to commission the Pilgangoora project by the end of this year, with ramp up set for 2018.