Chile’s SQM (NYSE: SQM), the world’s second-largest lithium producer, has inked an earn-in agreement with Tambourah Metals (ASX: TMB) covering the Australian explorer’s Julimar North Project in Western Australia
Under the deal, SQM will make a minimum investment of A$1.5 million ($1m) and up to A$3 million ($2m) to earn an initial 50% interest in all mineral rights at Julimar.
“The new relationship will allow Tambourah to draw upon SQM’s technical expertise in pegmatite-hosted lithium exploration while allowing Tambourah to work in parallel on its other lithium and critical mineral projects,” Tambourah chief executive office Ralf Kriege said in the statement.
The Santiago-based lithium giant will also pay $350,000 to Tambourah for its previous expenditure on the project.
SQM has been extending its presence in Australia in recent years. It holds a 50/50 interest with Wesfarmers in the Mt. Holland lithium project, which is expected to come online by the second half of 2024 and produce up to 50,000 tonnes a year of lithium hydroxide.
The Mt Holland project includes an open-pit lithium mine and processing plant at Mt Holland, as well as a refinery at Kwinana, also in Western Australia.
The firm announced in January an A$4.2 million ($2.8m) investment in Australia’s Azure Minerals (ASX: AZS), which made it the lithium junior largest shareholder. The company also said it planned to invest a further A$15.8 million ($10.6m) in Azure.
Additionally, SQM has entered smaller farm-ins across Australia with companies including Kalamazoo Resources and Dart Mining.
The Julimar North asset spans several sub-projects and is said to be the largest exploration portfolio in the region behind Chalice Mining. Nickel, copper and platinum group elements mineralization has been detected across the projects, but no lithium has been identified so far.
During the three year earn-in for all mineral rights for the Julimar North tenements SQM will manage all exploration and meet all expenditure requirements. Each party will have pre-emptive rights in case of a sale.
Shares in Tambourah Metals skyrocketed on news of the deal, with the stock gaining almost 32% to A$0.14 by the end of Thursday’s trading session in Australia.
SQM remains bullish on the long-term outlook for the lithium market as it expects demand to reach almost 1.5 million tonnes by 2025.
The lithium giant, which bought a refinery plant in southwest China last year, said the facility was expected to be completed in the second quarter of 2023. SQM’s plan is to produce lithium hydroxide from lithium sulfate sourced in Chile.
