Novo Resources (ASX: NVO) (TSX: NVO) announced on Monday it has entered a strategic joint venture with Chile’s SQM, the world’s second-largest lithium miner, for the advancement of critical minerals exploration in Australia.
Novo currently holds a prospective land package covering approximately 9,000 square kilometres in the Pilbara region of Western Australia. Its main asset is the Nullagine gold project, which has over 3 million tonnes of indicated resources grading 2.4 grams per tonne for 234,000 oz. of contained gold.
The agreement with SQM is in relation to five of Novo’s prospective lithium and nickel exploration tenements in West Pilbara. The joint venture will take the name Harding Battery Metals to reflect the importance of the Harding River in the region, Novo said.
SQM will pay Novo A$10 million for a 75% interest in these tenements, and holds a 12-month option over additional Novo exploration tenements in West Pilbara. Novo will retain a 25% interest, along with 100% ownership of the gold, silver, PGE, copper, lead and zinc mineral rights in the region.
Novo’s 25% interest will be carried by SQM until a decision to mine is made by the Harding Battery Metals JV participants. The Australian miner will also be entitled to a contingent success payment based on the lithium contained in a JORC-compliant ore reserve upon completion of a feasibility study.
The agreement with SQM, according to Novo, is a significant milestone for the company, as it provides leverage to battery metals discoveries across a package of tenements located near Azure Minerals’ Andover lithium-nickel project and Artemis Resources’ Carlow Castle gold-copper-cobalt project.
“SQM has been very active in the Western Australian lithium sector with a ~19% shareholding in Azure Minerals, and a 50% JV with Wesfarmers in Mt. Holland, that among other investments demonstrates that SQM clearly sees the potential of Western Australia for battery metals, as do we for gold,” Novo’s acting CEO Mike Spreadborough said in a news release.
Shares of Novo Resources traded 15.4% higher on the Australian exchange late Monday afternoon, with a market capitalization of A$298 million ($199.6m).
