REG - Aterian PLC - Lithium Joint Venture with Rio Tinto in Rwanda

AterianAnnouncement

01/08/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230801:nRSA8143Ha&default-theme=true

RNS Number : 8143H  Aterian PLC  01 August 2023

01 August 2023

 

Lithium Joint Venture with Rio Tinto in Rwanda

Aterian Plc
("Aterian" or the "Company")

Aterian Plc (LSE: ATN), the exploration and development company advancing its
portfolio of African-focused critical and strategic metal assets, announces
that it has signed a definitive Earn-In Investment and Joint Venture Agreement
("Agreement") with Rio Tinto Mining and Exploration Ltd ("RIO") and Kinunga
Mining Ltd ("Kinunga"). The Agreement is for the exploration and development
of lithium and by-products at its HCK Joint Venture project ("Project")
holding the HCK licence (the "Licence") in the Republic of Rwanda.

 

Highlights:

·      RIO has the option to invest US$7.5 million in two stages to earn
up to a 75% interest in the Licence to explore for minerals vital for a
successful energy transition to renewable energy.

o  Stage 1 exploration expenditures of US$3 million over a period of up to
two years to earn a 51% interest in the Licence.

o  Stage 2 exploration expenditures of US$4.5 million over a follow-on period
of up to three years to earn a further 24% interest in the Licence, taking
RIO's interest in the Licence to 75%.

·      Cash consideration of US$300,000 over the two stages.

·      A 2% capped Net smelter return ("NSR") granted over the Project
(capped at US$50 million).

·      RIO has the option to add Aterian's two other Rwandan projects,
pending licence approval with the authorities.

·      The Project has 19 identified pegmatite zones over its
2,750-hectare Licence in southern Rwanda.

·      Project located close to good infrastructure, including national
highways, power and water.

 

Charles Bray, Chairman of Aterian, commented:

"This is a transformative deal for Aterian and highlights our ability to
identify potential world-class deposits in critical minerals such as
lithium.  We have identified 19 separate LCT (lithium-caesium-tantalum)
pegmatite zones across the 2,750-hectare project offering the prospective
scale necessary to attract such a major partner as Rio Tinto.

 

I am very proud of the Aterian team and their work to identify and unlock
strategic mineral assets in Africa and to make this transaction possible. I
would like to thank Rio Tinto for their time working with us to enable this
investment in the significant lithium potential in Rwanda. I am also grateful
for the support from our partner, HCK Mining Company Limited and for the
continued partnership with the Rwanda Mines, Petroleum and Gas Board who have
been crucial to completing the transaction. We believe this investment
highlights the opportunity and transformational potential of the Rwanda mining
sector.

Lithium is a key commodity for global electrification ambitions, as it is the
central chemical element of dominant battery chemistries. Benchmark Minerals
Intelligence forecasts that in 2023 lithium demand will reach 900,000 tonnes,
a jump of 27% year-over-year and further forecast to reach 1.5 million tonnes
in 2026.

 

The Agreement with Rio delivers material value to Aterian shareholders
endorsing Aterian's capital efficient business model as well as demonstrating
the potential of Rwanda as a mining jurisdiction. The Agreement is subject to
conditions, including the addition of lithium as an exploration commodity on
the licence, which is expected in due course.

While we focus on working closely with Rio Tinto and our Rwandan stakeholders
to ensure the success of this project, we will also look to replicate the
capital efficient exploration and development business model in our other
project concessions in Rwanda and Morocco."

 

 

Key Terms of the Agreement

RIO has the option to incur work expenditure of US$3 million over a two-year
period ("Stage 1") to earn an initial 51% interest in the Licence. RIO will
also make cash payments to Aterian, totalling US$300,000, to reimburse
previous operational expenses incurred by Aterian. An initial payment of
US$200,000 is due upon completion of satisfactory due diligence by RIO, and an
additional payment of US$100,000 will be due at the start of Stage 2.

 

Upon earning a 51% interest in the Licence, RIO can earn an additional 24%
interest in the Licence by funding additional work expenditures of US$4.5
million over a three-year period ("Stage 2"). After Stage 2 RIO will, provided
it contributes the additional funding, hold a 75% interest in the Licence.

 

RIO has agreed to a 2% NSR over the project with a US$50.0m cap that will be
due by the future Joint Venture between RIO and Kinunga to a holder/holders to
be notified by Aterian to RIO prior to the NSR agreement being entered into
and such holder/holders to be subject to completion of satisfactory due
diligence by RIO.

 

Under the terms of the Agreement, RIO has an exclusivity option to invest into
Aterian's two other existing Rwandan projects, which will be subject to their
own separate agreements. A management committee comprising representatives of
both RIO and Aterian will be formed to provide financial and operational
oversight. RIO will act as the operator for the Project.

 

The HCK Project

Aterian has a Joint Venture Agreement and Operating Agreement with HCK Mining
Company Limited, a private non-related Rwandan registered entity over a
2,750-hectare exploration licence in southern Rwanda. Aterian holds a 70%
interest in Kinunga Mining Limited, which holds the licence for the Project,
with HCK Mining Company Limited holding a 30% interest. The licence is located
approximately 65 km southwest of Kigali and 20 km northwest of Huye, within
the Southern Province, straddling the Nyanza and Huye District boundaries.

 

The HCK licence is underlain by schists and minor intrusive bodies of the
Palaeoproterozoic granitic-metamorphic Butare Complex, lying to the west of
the Gitarama granitic massif. The Complex is surrounded by low-grade
metasedimentary terrains and is bordered to the north by a significant NW-SE
left-lateral shear zone, the Mwogo Structure. Prospecting has identified 19
zones of potentially rare metal hosting pegmatite, frequently with multiple
pegmatite dykes observed at most locations.

 

Recent work has focused on the HCK-1 prospect, which follows a prominent
northwest-trending ridgeline. Field observations indicate that the strike of
the HCK-1 target zone extends for at least 2,500 m. The width of the target
zone is uncertain, but in several locations along exploration pit section
profiles, pegmatite is intersected over a horizontal distance of c.100 m.

 

A positive outcome from the exploration pitting is that 800 m of the
identified pegmatite strike continuation occurs in a "greenfield" environment
to the southeast of the main ridgeline hosting HCK-1. This can be described
simply as an area without observed artisanal workings, pegmatite outcrop, or
surface expressions. The pegmatite bodies discovered during the pitting remain
blind to the surface covered by soil and regolith of variable thickness up to
4.50 m. A drone survey has been flown over HCK-1, covering an area of 360
hectares, to provide detailed imagery with topographic data and a current view
of the earlier artisanal workings.

 

In Q1 2023, a ground-based multi-method geophysical survey was undertaken over
the HCK-1 target. The survey, comprising magnetometry, induced polarisation
("IP"), and electrical IP tomography, was designed to provide information on
the main geological controlling structures for the emplacement of the
pegmatite bodies, the depth of weathering and recommended targets for detailed
follow-up. This work identified four sub-cropping pegmatite bodies and
highlighted the strong structural control on pegmatite emplacement with at
least three deformation events interpreted.

 

An independent geochemical study of weathered surface samples collected over
the HCK-1 pegmatite shows encouraging evidence for lithium-tantalum
enrichment. Given the deep tropical weathering, the enrichment of lithium (16
samples > 150 ppm) is seen as encouraging for locating lithium pegmatites
at depth (below the weathering zone). The indicated presence of tourmaline and
beryl from several localised zones along the strike of the HCK-1 pegmatite may
imply internal zonation and/ or that the bedrock source pegmatite comprises
more 'complex' pegmatites (which are generally the targets in LCT pegmatite
exploration). The low rubidium levels associated with anomalous lithium may
imply a non-mica lithium source and the low levels of phosphorus vector toward
a more spodumene-rich bedrock target.

Aterian Plc:

Charles Bray, Executive Chairman - charles.bray@aterianplc.com
(mailto:charles.bray@aterianplc.com)

Simon Rollason, Director - simon.rollason@aterianplc.com
(mailto:simon.rollason@aterianplc.com)

 

Financial Adviser and Broker:

Novum Securities Limited

David Coffman / George Duxberry

Colin Rowbury

Tel: +44 (0)207 399 9400

 

Financial PR:
Bald Voodoo - ben@baldvoodoo.com

Ben Kilbey

Tel: +44 (0)7811 209 344

 

Notes to Editors:

 

About Aterian plc

www.aterianplc.com (http://www.aterianplc.com)

 

Aterian plc is an exploration, trading, and development company with a
diversified portfolio in Africa of critical and strategic metals projects.

Aterian plc seeks to acquire and develop new critical and strategic metal
resources to strengthen its existing asset base whilst supporting ethical and
sustainable supply chains. The supply of these metals is vital for developing
the renewable energy, automotive, and electronic manufacturing sectors, which
are playing an increasing role in reducing carbon emissions and meeting
climate ambitions globally.

 

The Company currently has three partnerships in Rwanda, exploring and
developing small-scale tantalum-niobium-tin mining opportunities and recently
acquired Aterian Resources Ltd, which owns a portfolio of 15 copper and silver
projects with a project area of 762 km(2) in the Kingdom of Morocco.

 

The Company is launching a new OECD-compliant metals concentrate trading
business in Rwanda via its 100% owned subsidiary Eastinco Ltd.

 

The Company's strategy is to seek new exploration and production opportunities
across the African continent and to develop new sources of strategic and
critical mineral assets for exploration, development, and trading.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  DOCKZGFNRMRGFZM