Dempsey Minerals Ltd. signed an exclusive option agreement with Australian company Blue Sky Lithium Pty. Ltd. to acquire latter's interests in mining tenements in the lithium-bearing Hombre Muerto salt flat in Argentina's Catamarca province.
The agreement allows the company to either acquire the tenement interests or 100% of Blue Sky's issued capital, according to the Feb. 6 release.
Following exercise of the option, the company intends to conduct surface testwork, geophysics, and secure drilling permits to estimate a maiden JORC-compliant resource.
To exercise the option, Dempsey will pay an option fee of 3.0 million shares and 3.0 million options, exercisable at 14 Australian cents per share, before Dec. 31, 2019.
The company will issue a further 17.0 million shares and 12.0 million options on completion.
The delineation of a resource of at least 80,000 tonnes of lithium carbonate equivalent will trigger the issuance of another 15.0 million shares, and the start of commercial production from a pilot plant will result in a further issuance of 10.0 million shares.
