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Cadence Minerals shares rise on lithium assets deal in Argentina

Cadence Minerals Plc shares rose by over 11% in London on Dec. 12, after the company announced binding investment deals with Lithium Technologies Pty. Ltd. and Lithium Supplies Pty. Ltd. to acquire up to a 100% interest in six prospective hard rock lithium assets in Argentina.

The company had said in November that it was reviewing several early stage lithium assets.

"These transactions mark the start of the company's strategic shift to earn in to early stage lithium assets in well-known lithium jurisdictions where we see the potential to deliver shareholder value by investing in projects that have shorter development timeline to cash flow than a typical lithium carbonate producer," the company said Dec. 11.

Cadence Minerals noted that the vendors own claims covering 55,773 hectares over six exploration permits within known spodumene-bearing pegmatite fields in San Luis, with initial site visits and reviews confirming multiple pegmatite outcrops across the six claims.

According to the release, the properties have good access and infrastructure support to enable year-round exploration.

Upon granting of the exploration permits, the company will acquire up to a 49% stake in the permit area by spending £1.1 million on exploration and issuing £400,000 of new ordinary shares to the vendors.

Cadence has an option to acquire up to 100% by issuing a further £1.8 million of new ordinary shares. The vendors will retain a 1.5% net smelter royalty, which will be deferred and only payable on repayment of any capital or debt related to the construction of a processing facility.

The company aims to define and prioritize targets through geological mapping and mineralogical studies ahead of sampling and drilling, with work to start in early 2018.