Andrada partners with SQM to develop Namibia lithium asset

The Agreement is subject to conditions precedent, including the Namibian Competition Commission approval. The Company management believe that the approval will be obtained, and a further announcement will be made at that time.

Highlights

• A new wholly owned subsidiary of Uis Tin Mining Company Limited, Grace Simba Investments (Pty) Ltd (“GSI”), now holds the Lithium Ridge mining licence.
• The SQM Agreement brings both the financial and technical capabilities required to explore and develop Lithium Ridge.
• Under the Agreement, SQM can earn into GSI by solely funding both the exploration and, in the future, a Definitive Feasibility Study (DFS) at Lithium Ridge. The key considerations and milestones contained in the Agreement are:
  • SQM agrees to pay Andrada a US$500 000 participation fee on signing and a further US$1.5 million upon satisfaction of conditions precedent.
  • SQM has an option to invest US$20 million over three and a half years, in different stages to earn a 40% ownership of GSI.
  • Subsequent funding of the DFS will enable SQM to attain up to 50% ownership in GSI.
• Payment of a one-off success fee will be payable by SQM should Andrada complete a JORC (2012) compliant Mineral Resource Estimation exceeding 40 million t during the third earn-in period. The fee will be calculated based on the percentage of lithium oxide content in the resource.
• Andrada will manage and operate the project during the earn-in period.
• Andrada and SQM will create a joint development committee (JDC) to oversee the development of GSI. The JDC will be constituted of an equal representation of members from SQM and Andrada management.
• The Agreement enables Andrada shareholders and Namibian stakeholders to benefit from the accelerated development of one of Andrada’s lithium assets.

Anthony Viljoen, Chief Executive Officer, commented:

“We are incredibly pleased to announce our partnership with SQM, a global leader in the lithium industry and to be part of the first African partnership that SQM has entered. This partnership solidifies our belief in the Lithium Ridge asset as a potential world-class resource, and further establishes Andrada as a multi-asset, polymetallic explorer and miner. We believe this partnership also significantly enhances the value of our entire asset portfolio. Furthermore, partnering with SQM provides the ideal partner to unlock the full potential of Lithium Ridge, while allowing continuation of the development of Uis through our existing financing relationships.

The SQM partnership aligns perfectly with our strategic objectives, enabling us to develop our neighbouring lithium asset, and to accelerate exploration initiatives. The terms of this agreement establish a long-term, value-creating relationship that incentivises operational milestones and delivers sustained returns for our shareholders. The introduction of a substantial player in the global lithium market will also place Namibia at the forefront of the African lithium development trajectory and unlock value for the Namibian mining industry.

Mark Fones, SQM International Lithium division CEO, commented:

“We are excited to announce the completion of this agreement, which confirms our commitment on finding the best lithium assets in the world that efficiently diversify our portfolio. Namibia is among the top mining jurisdictions in the region, and we are pleased to begin exploration with a proven partner like Andrada Mining.”

Read the article online at: https://www.globalminingreview.com/mining/09092024/andrada-partners-with-sqm-to-develop-namibia-lithium-asset/