NRG Metals Inc. said Oct. 17 that it entered into a letter of intent with China-based Chengdu Chemphys Chemical Industry Co. Ltd. to advance the exploration and development of the Hombre Muerto North lithium project in Argentina.

The parties intend to evaluate Hombre Muerto North through exploration, due diligence and satisfactory studies, which may include a preliminary economic assessment, to rapidly advance it into production.

In addition, NRG agreed to an off-take agreement with Chemphys for the sale of any lithium produced at Hombre Muerto North, as well as a first right of refusal and first right of offer for the sale of lithium produced at any other projects that NRG moves forward and board representation.

In connection with the agreement, the two parties intend to complete a private placement with investors acceptable to Chemphys.

The placement will consist of about 14 million units priced at 10 Canadian cents apiece to raise C$1.4 million in proceeds.