The share price of Dynamic Metals surged 28% on Tuesday as the company unveiled a landmark A$20-million lithium-focused joint venture (JV) with Mineral Resources (MinRes).
The nearby location of the Bald Hill mine, operated by MinRes, could offer a pathway to production for any discoveries on Discovery’s Widgiemooltha project.
In terms of the agreement, Dynamic will sell 40% of its lithium rights on Widgiemooltha for A$5-million in cash and form a 60:40 JV to advance lithium exploration on the project.
MinRes could increase its stake to 65% by sole funding an additional A$15-million of exploration expenditure on the tenements over the four years following completion. The group has an ability to increase its stake to 80% by sole funding expenditure through to a decision to mine.
Dynamic retains its right to explore for other minerals in the region, which is renowned for nickel and gold prospectivity.
“The Widgiemooltha project is a regionally significant tenement package that has yet to be fully assessed for its lithium potential. Although we have had some encouraging results with our first pass exploration activities, the sheer size of the project means that it would likely have taken Dynamic many years and considerable expenditure to assess its potential and realise value,” said MD Karen Wellman.
Dynamic Metals’ share price rose 28% to A$0.20 a share on Tuesday.