Sayona Mining Ltd. secured an option from Great Sandy Pty. Ltd. to acquire an 80% interest in an 871-square-kilometer package of tenements in Western Australia's Pilgangoora lithium district.
The option includes the Mallina, Mount Edgar, Dorringtons and White Springs project areas.
Under the terms, Sayona can acquire the interest by making staged payments totaling A$300,000 in cash or shares at Great Sandy's election within 12 months of signing, and an additional A$300,000 within 24 months.
The company can also acquire the interest at any time for A$500,000 within the first 18 months.
A minimum exploration expenditure of A$100,000 is required within the first 12 months.
Great Sandy will retain a 20% free carried interest to decision to mine, which is convertible into a 2% gross production royalty at any time.
Meanwhile, Sayona will acquire rights to all pegmatite-related minerals, with Great Sandy retaining the rights to all nonpegmatite minerals.
Sayona may withdraw from the agreement at any time after incurring the minimum exploration expenditure. The company will also be required to keep tenements in good standing.
According to a Dec. 21 release, Sayona plans to beginmapping and geochemical sampling at the Mallina project in early 2017, to generate drill targets.