PERTH (miningweekly.com) – Lithium developer Pilbara Minerals is buying a project adjacent to its Pilgangoora lithium/tantalum project in Western Australia, announcing on Thursday that it will add Dakota Minerals’ Lynas Find to its portfolio.

Pilbara Minerals MD Ken Brinsden said the purchase consolidated the company’s lithium footprint in the Pilbara region and reinforced Pilgangoora’s position as the dominant project in the lithium province.

“The acquisition provides the potential for additional new high-grade satellite ore feed to the central processing plant at Pilgangoora, based on the initial mineral resource for the Lynas Find project, reported this week. Importantly, these additional tonnes are located close to surface and are at an attractive average grade, which would enhance our overall resource and further reserve inventory.”

Brinsden noted that the Dakota tenement package also contained numerous prospective new areas for lithium exploration, helping to strengthen Pilbara Minerals' long-term growth pipeline.

Lynas earlier this week announced a maiden mineral resource of 7.3-million tonnes, grading 1.25% lithium oxide, 85 parts per million (ppm) tantalum pentoxide, and 0.99% iron oxide for the Lynas Find project.

The Pilgangoora project currently hosts a mineral resource of 128.6-million tonnes, grading 1.22% lithium oxide, 138 ppm tantalum oxide and 0.63% iron oxide.

The two companies have signed a binding agreement under which Pilbara will acquire the Lynas Find granted tenements for A$4-million. An additional A$1-million payment will be made on the granting of a term extension on one of the core tenements.

Pilbara has also agreed to pay a further A$750 000 for each of an additional four Pilgangoora exploration tenements, which are currently under application by Dakota Minerals. These payments will be triggered by the successful grant and transfer of the tenements to Pilbara in the following 12 months.

These payments could be made in either cash or shares.

Meanwhile, Dakota plans to use the proceeds raised from the sale of the Lynas Find project to accelerate its European lithium strategy at a time when major industrial groups in the region are increasing their reliance on the commodity.

“The directors see this transaction as a win for Dakota shareholders. The transaction puts the company in a very strong financial position to rapidly advance its strategy of becoming a globally significant lithium company and leading supplier of lithium hydroxide and lithium carbonate to the rapidly developing European battery industry,” said Dakota CEO David Frances.

Dakota owns the Lusidakota project in Portugal, which it bought earlier this year. At the time of the acquisition, Frances said that the company viewed Europe as an “instrumental part” of the electric vehicle (EV) market, with the continent leading the world in uptake of EVs using lithium-ion batteries.