REG - Bradda Head Lithium - Joint Venture Agreement for Whistlejacket Project

Bradda Head LithiumAnnouncement

27/01/2026 07:00

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RNS Number : 5163Q  Bradda Head Lithium Ltd  27 January 2026

27 January 2026

Bradda Head Lithium Ltd

("BHL" or the "Company")

Definitive 'Option to Joint Venture' Agreement Signed for up to 60% of
Whistlejacket Lithium-Bearing Pegmatite Property, Arizona, USA

Notice of General Meeting

 Convertible Loan Note Facility

 

Bradda Head Lithium Ltd (AIM: BHLL), the North America-focused lithium
development group, is pleased to announce that it has entered into a binding
and definitive 'Option to Joint Venture' agreement (the "Agreement") with
Kennecott Exploration Inc.- part of the Rio Tinto Mining Group of Companies
("KEX") which sets out the agreed commercial terms pursuant to which it is
proposed that the Company will earn-in to certain licenses over prospective
acreage in Arizona (the "Whistlejacket Project" or  the "Project") (the
"Proposed Transaction"). Under the terms of the Agreement BHL can acquire up
to a 60% legal and beneficial interest in the Whistlejacket project in
Arizona, USA in phases based on agreed earn-in amounts as set out below.

The Board of Bradda Head believes the Project represents a compelling
opportunity to expand its hard rock lithium project portfolio in Arizona, USA
which currently includes its nearby existing San Domingo Project and to
continue exploration drilling that could lead to an economic lithium spodumene
resource in one of the best jurisdictions in the world for mining projects.

The Agreement is conditional on the approval of the Proposed Transaction by
Bradda Head shareholders and therefore the Company will shortly post a
circular seeking Shareholder's approval for the Proposed Transaction. A copy
of the circular together with an accompanying CPR (prepared by Hains
Engineering Company Limited) will be available on the Company's website -
www.braddaheadltd.com (http://www.braddaheadltd.com) . A further announcement
will be made when the circular is posted with details of the General Meeting
to be held.

Highlights

 •    Option in Phase 1 to earn-in and acquire 51% followed by an Option in Phase 2,
      at the discretion of BHL, to earn-in and acquire an additional 9% for a total
      of 60% of the Whistlejacket Project
 •    Clearly defined phases, project milestones and expenditure requirements
      incentivizing development of the asset
 •    At the end of each phase of the earn-in, KEX will have an option to reacquire
      the interests in the Project earned by the Company at a multiple of the
      expenditures made by the Company, and if such option is not exercised, the
      Company shall have the option to acquire all remaining interests in the
      Project held by the KEX
 •    Whistlejacket Project consists of 9 state MEP's (Arizona State Lands
      Department Mineral Exploration Permits) for a total size of 4,486.07 acres,
      complementary to Bradda's existing portfolio
 •    KEX conducted exploration drilling on spodumene bearing pegmatites, completing
      a total of 19 holes for a total of 4,188 meters of core with assay results
      showing lithium hydroxide mineralization in all holes, including 41.0 meters
      at 1.22% Li2O in hole WSTL0009 and 19.47 meters at 1.65% Li2O in hole WSTL0008
 •    KEX has also conducted surface mapping, sampling, airborne geophysics, and
      collected high resolution air photos over much of the property, greatly
      enhancing its value
 •    No mineral resource on the Whistlejacket property has been calculated by KEX
 •    Results from the core drilling, surface geochemistry and geological mapping
      show potential to expand the pegmatite mineralization laterally and at depth,
      whilst many pegmatites have not been drill tested and contain several rock
      chip samples at >2.0% Li2O
 •    Sufficient due diligence has been undertaken on exploration dataset in
      addition to the land tenure with no technical issues being identified
 •    The property has year-round access to road infrastructure throughout,
      technical personnel/services and accommodation in the nearby towns of
      Wickenburg or Prescott, Arizona
 •    The Project is 140 km northwest of the state capital, Phoenix, 11 km from the
      Company's existing Basin asset, 80 km from San Domingo, and is 3 km away from
      the operational Bagdad porphyry copper-molybdenum mine operated by Freeport
      McMoRan.

 

Proposed Transaction subject to Shareholder Approval

The Proposed Transaction does not constitute a reverse takeover under Rule 14
of the AIM Rules for Companies, but in the interests of good governance, and
in consultation with the Company's nominated adviser, under the terms of the
Agreement the Proposed Transaction is subject to approval of the Company's
shareholders. The Company will shortly publish a circular including a notice
of general meeting (the "Circular"), convening a meeting of shareholder to be
held (the "Meeting"). Details of arrangements for the Meeting will be set out
in is the Circular which will be available on the Company's website at
https://www.braddaheadltd.com/investors#ShareholderDocuments
(https://www.braddaheadltd.com/investors#ShareholderDocuments) .

In addition to the notice of Meeting, the Circular will include a summary of
the Company's current assets, details of the proposed work programme and
budget for the earn-in, funding arrangements entered into as well as a
recommendation as to why the Directors of the Company unanimously recommend
shareholders vote in favour of the Proposed Transaction. The Circular will
also include summary information from a comprehensive technical report
constituting a Competent Person's Report under the AIM Rules, as well as Risk
Factors and other information the Company considers relevant for a shareholder
in making a decision whether to approve the Proposed Transaction. The full
Competent Person's Report is available on the Company's website at
https://www.braddaheadltd.com/investors#TechnicalReports
(https://www.braddaheadltd.com/investors#TechnicalReports) .

Ian Stalker, Executive Chair and Director commented:

"Subject to approval by shareholders at the forthcoming general meeting, the
Whistlejacket Project will be a fabulous acquisition for the Company which we
are excited to add to our lithium portfolio and plan on commencing exploration
as soon as possible. The project has excellent access in a great jurisdiction
on state land, close to both our Basin and San Domingo projects, and has the
potential to become a significant asset to the Company. Our partners at
Whistlejacket are part of one of the leading international mining companies
and we are delighted that they have chosen Bradda Head to drive forward the
exploration and potential development of the Whistlejacket Project.

"The acquisition of Whistlejacket fits exceptionally well with the Company's
exploration model and advancements over the past three years at San Domingo, a
mere 80 km to the southeast. Subject to completion of the acquisition, all
exploration dollars allocated towards Whistlejacket will go directly into the
ground as the Company is planning an aggressive drilling program in the near
future, once additional surface sampling and mapping are completed. The
potential at Whistlejacket starts with a dedicated and experienced team that
will deliver the best results possible through strategic drill testing of
existing and new targets. Further information on the targets and planning will
be provided in due course.

"The work conducted to date by KEX is of the highest standard, utilizing Best
Management Practices and provides Bradda Head with an exceptional foundation
to leverage our strategic and future drill planning. The extensive data
collected demonstrates positive aspects for crushing and ore processing.
Furthermore, and examining potential synergies, our metallurgical studies
previously conducted on San Domingo drill core composites determined
significant cost savings through AI assisted mineral ore sorting upgrades and
provide the Company with optimism that a path to production is possible,
initially at San Domingo and then Whistlejacket."

Earn-in Expenditure; Convertible Loan Agreements ("CLAs").

During the course of the earn-in, the Company will need to meet minimum
expenditure and work programme milestones to acquire its interest in the
Whistlejacket Project. In particular the Company will incur expenditure of not
less than US$ 750,000 in the first year following approval of the Agreement
(such date being the "Completion Date"), and up to a total of US$ 5.5 million
in the first three years following the Completion Date if the Company wants to
acquire the initial 51% interest. To take the Company's interest to 60% the
Company will need to incur expenditures of a further US$ 12 million over a
further 3-year period (US$ 3.75 million in year 4, US$ 3.75 million in year 5,
and US$ 4.5 million in year 6).

As at the date of the Agreement the Company does not have all of the capital
required to meet its earn-in commitment in Year 1 (which is guaranteed by
Bradda), and to cover expenditure in the first three years following the
Completion Date, required to acquire the 51% interest in the Whistlejacket
Project.

As a bridging support facility, the Company has agreed the terms for
convertible loan facilities to be made available to it by Galloway Limited
("Galloway") and Promaco Limited ("Promaco").

Galloway is a company indirectly wholly owned by Jim Mellon, a Director of the
Company, and which is the Company's largest shareholder. Promaco is indirectly
wholly owned by John Ian Stalker, the Executive Chair of the Company. Under
the terms of the CLAs, Galloway and Promaco will be investing US$ 1,025,000
and US$ 250,000 respectively, resulting in a total of US$ 1,275,000 in the
Company (in addition to amounts already provided under the existing Galloway
Facility as set out below).

The size of the facilities can be increased with the written agreement of
Galloway and Promaco. As announced on 25 September 2025, Galloway made a US$
500,000 facility available to the Company to support its working capital. All
sums drawn under that existing loan facility, including interest thereon,
shall be applied to the CLA entered into with Galloway. At the date of this
Announcement, a total of US$ 500,000 has been advanced by Galloway under the
existing Galloway Facility and the total principal amount subject to the CLA
entered into with Galloway shall be US$ 1,525,000.

The terms of the CLAs are set out below:

·    Unsecured 24-month facility (expiry being the "Maturity Date");

·    repaid amounts may not be redrawn;

·    The outstanding balance of the CLAs (including interest) may be
converted into new ordinary shares in the capital of the Company ("Ordinary
Shares") at any time at the option of the lender;

·    The amounts outstanding pursuant to the CLAs (including interest)
will automatically convert into new Ordinary Shares concurrent with an equity
financing by the Company to raise not less than £2 million (gross) prior to
the Maturity Date (a Qualifying Fundraise");

·    Conversion Price equal to 90% of the 30-day volume weighted average
price at close of trading on the last trading day prior to the date notice to
convert the CLAs is proposed, if converted at the election of the lender, or a
price equal to 90% of the price paid by investors participating in the
Qualifying Fundraise;

·    Amounts outstanding under the CLAs carry a 10% annual coupon,
accruing monthly.

Conversion of CLAs subject to Shareholder Approval

The conversion of the amounts outstanding under the CLAs gives rise to certain
considerations under the Company's memorandum and articles of association
("Articles"). As a BVI company, the Company is not subject to the UK Takeover
Code. However, Regulation 24 of the Articles sets out provisions regulating
takeover offers in respect of the Company. In particular, Regulation 24.2(a)
provides that a person must not, whether by himself or with persons determined
by the Board to be acting in concert with him, acquire an interest in shares
which, taken together with shares in which persons determined by the Board to
be acting in concert with him have become interested, carry 30 per cent. or
more of the voting rights attributable to all the shares of the Company,
except as a result of a "Permitted Acquisition". A "Permitted Acquisition"
would either be (i) an acquisition approved by Shareholders (excluding any
Shareholder carrying out the acquisition together with all persons determined
by the Board to be acting in concert with him) or (ii) an acquisition carried
out in accordance with Rule 9 of the UK Takeover Code (as if such provision
applied to the Company), whereby an offer would need to be made to
Shareholders.

Under the CLAs, a conversion notice shall not be capable of being served if as
a result of the conversion pursuant to that conversion notice, the lender
(being either Galloway or Promaco), together with persons with which they are
acting in concert, would as a result of the conversion, hold 30% or more of
the issued Ordinary Shares of the Company unless such issuance of Ordinary
Shares would constitute a "Permitted Acquisition" (the "Conversion
Condition").

It is not expected that the conversion of the Promaco CLA into Ordinary Shares
will cause Promaco, together with any parties acting in concert with them, to
hold 30% or more of the Ordinary Shares in issue. However, as the largest
shareholder in the Company, there is a possibility that the conversion of the
Galloway CLA could cause the shareholding of Galloway, together with parties
acting in concert with Galloway, to reach 30% or more of the Ordinary Shares.
As the conversion amount is not fixed and remains subject to determination at
the time of conversion, this cannot be known for sure at this time.
Accordingly, it is proposed that the issue of Ordinary Shares pursuant to the
CLAs be approved by the Shareholders independent of Galloway and Promaco (and
their respective concert parties) in the Meeting for the purposes of
Regulation 24.1(e)(i) and Regulation 24.2(a) of the Articles such that the
conversion of the CLAs shall not cause any requirement for an offer to be made
to Shareholders under Regulation 24 of the Articles.

AIM Rule 13

As Jim Mellon and Denham Eke are both directors of the Company, and Jim Mellon
is the 100% beneficial owner of Galloway Limited and Denham Eke its Managing
Director, and John Ian Stalker, the Company's Chair, is the 100% beneficial
owner of Promaco Limited, the provision of the CLAs is a Related Party
Transaction under the AIM Rules. Accordingly, the independent directors, being
Alex Borrelli and Euan Jenkins, having consulted with the Company's Nominated
Adviser, consider that the terms of the CLAs are fair and reasonable insofar
as the Company's shareholders are concerned. In forming this view the
independent directors have noted the following:

-      the minimum US$ 750,000 commitment of the Company over the next 12
months (should the Proposed Transaction be approved by shareholders);

-      the Board's support for the Proposed Transaction and the potential
benefit the Board believes this will provide all Bradda shareholders;

-      the need to satisfy KEX that the Company has capital to meet the
guaranteed expenditure prior to signing the Agreement;

-      the current cash position of the Company and the amounts due under
the existing loan facilities provided by Galloway;

-      the need for the Company to complete a Qualifying Fundraise within
the next 12 months, providing

capital to meet expenditure commitments in year two (and potentially beyond)
under the Agreement;

-      planned continued expenditure of the Company on its existing
assets over the next 12 months as well as general working capital
requirements;

-      the unsecured nature of the CLAs;

-      the cost of alternative short-term bridge finance to satisfy KEX
and prior to a Qualifying Fundraise; and

-     the positive market message of Galloway Limited, the Company's
largest shareholder, and Promaco Limited, being wholly owned by the Executive
Chair of Bradda Head, providing further financial support to support
management.

Further Information Regarding the Option to Joint Venture Agreement

Phase 1 Expenditure Requirements, Schedule and Project Milestones

·    Following agreement of shareholders, BHL will initiate Phase 1
exploration over a 3-year period with annual expenditures of

o  US$ 0.75 million (guaranteed expenditure) in year 1, focused on
exploration;

o  US$ 2.0 million in year 2 on exploration, studies and permitting; and

o  US$ 2.75 million in year 3 on exploration, studies and permitting

for a total of US$ 5.5 million, which earns BHL a 51% in the Project and 49%
ownership with KEX and an option to form a joint venture

·    Within 90 days of completion of Phase 1, KEX will have the ability to
buy back the interests in the Project from the Company. The acquisition
consideration would be 2.5 times the documented expenditures by the Company to
earn its interests in the Project.

·    In the event that KEX does not exercise its right to buy back the
interests in the Project from the Company, BHL may then choose to proceed to
Phase 2 or otherwise for an incorporated joint venture to be formed with it as
the 51% shareholder.

 

Formation of the Technical Committee

 

Upon commencement of Phase 1, BHL and KEX will form a technical committee
comprised of two representatives from each party (the "Technical Committee").
The Technical Committee will govern the technical, logistical and budgetary
matters applicable to the development of and operations on the Property until
the formation of the joint venture, at a minimum of 51%/49% ownership. The
Technical Committee will direct the operator with respect to the structure and
requirements of any approved budget and program. The affirmative vote of a
majority of the members of the Technical Committee will constitute the
decision and action of the Technical Committee. Failure to obtain the
affirmative vote of a majority of the members of the Technical Committee
(including in the event of a deadlock) shall mean that a decision or action is
not adopted. If no decision is made, the Technical Committee will negotiate in
"good faith" until an agreeable program is adopted. The Technical Committee
will meet semi-annually to review technical results, expenditures, status of
tenements and any applications, work programs and budgets.

 

Throughout the term of the Agreement and thereafter, BHL's subsidiary Zenolith
(USA) LLC will be responsible for appointing the initial manager and operator
of the Whistlejacket Project. The operator's duties shall include the adoption
of a work programme and budget, maintenance of the Whistlejacket Project in
good standing, maintain accounts and records for the Whistlejacket and provide
the same to the KEX, develop a rigid health and safety environment to prevent
accidents and environmental incidents and conduct field activities, such as
drilling and road construction, with highest BMP's (Best Management
Practices).

Option to Proceed to Phase 2

Within 30 days of completion of Phase 1, BHL has the option to proceed to
Phase 2 or can remain at 51%. If proceeding to Phase 2 it may earn into an
additional 9% interest in the Project, on the following terms:

·    Phase 2, Year 4, expenditures of US$ 3.75 million in exploration,
studies, and permitting

·    Phase 2, Year 5, expenditures of US$ 3.75 million in exploration,
studies, and permitting

·    Phase 2, Year 6, expenditures of US$ 4.50 million in exploration,
studies, and permitting

At the conclusion of Phase 2, cumulative expenditures in Phase 1 and 2 are
expected to meet or exceed US$ 17 million, with Phase 2 expenditure giving BHL
an additional 9% ownership and interest and bringing total ownership to 60%,
with KEX owning the remaining 40% in the Whistlejacket Project. Formation of a
joint venture between BHL and KEX to immediately follow completion of Phase
2. Within 90 days of completion of Phase 2, KEX will have the ability to buy
back the interests in the Project from the Company. The acquisition
consideration would be 3x the documented expenditures by the Company to earn
its interests in the Project.

Upon completion of Phase 2 (and subject to the KEX not exercising its buyback
options), the joint venture will proceed with weighted expenditures based upon
percentage of ownership, 60% by BHL and 40% by KEX. A joint venture committee
will be formed consisting of two representatives from each company. Work
programs and expenditure budget proposals will be tabled on an annual basis to
the joint venture committee for approval. If either company is unwilling or
unable to subsidize their share of the entire proposed budget, their ownership
percentage will be reduced by standard and industry accepted reduction
equations.

Net Smelter Royalty ("NSR")

 

If either company fails to contribute to the joint venture and their share of
the new company falls below 10%, their ownership is reduced to a 2.0% NSR.

 

BHL option to acquire KEX's retained interests in the Whistlejacket Project

 

BHL has the option to purchase KEX's 49% interest in the Project upon
completion of Phase 1, but only at the discretion of KEX. The purchase price
following completion of Phase 1 would be US$ 7.5 million. Similarly, after
completion of Phase 2, BHL has the option to purchase KEX's remaining 40% for
US$ 10 million, at the discretion of KEX. KEX would retain a 1.0% NSR if
either purchase is executed by BHL.

 

Expenditure to date by KEX

 

To the date of this transaction, KEX has incurred the following costs on the
Whistlejacket project:

 

-      Last 12 months total costs of US$ 51,100 which have all been
expensed; and

-      Total spend of US$ 5,485,275, of which 100% has been expensed.

 

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU No. 596/2014) AS IT FORMS PART OF UK DOMESTIC LAW BY
VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. UPON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE
INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS
SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

For further information, please contact:

 Bradda Head Lithium Limited                       Shard Capital

                                Beaumont Cornish                                  Tavistock

 Company                        Nomad              Broker                         Investor Relations
 Ian Stalker, Executive Chair   James Biddle /     Damon Heath / Isabella Pierre  Nick Elwes /

 Denham Eke, Finance Director   Roland Cornish                                    Josephine Clerkin
 +44 1624 639 396               +44 20 7628 3396   +44 207 186 9927               + 44 20 7920 3150

                                                                                  braddahead@tavistock.co.uk

 

Qualified Person (Bradda Head)

Don Hains, P.Geo.,President of Hains Engineering Company Limited, has reviewed
and approved the technical information disclosed in this announcement. He is a
registered as a Professional Geoscientist in Ontario (Licence #0494) and is a
Qualified Person/Competent Person as defined in National Instrument NI-43-101
and AIM regulations. He has over 45 years' experience in mineral exploration,
including over 25 years' experience in lithium pegmatite, lithium brine and
lithium clay exploration.

About Bradda Head Lithium Ltd.

Bradda Head Lithium Ltd. is a North America-focused lithium development
group. The Company currently has interests in a variety of projects, the most
advanced of which are in Central and Western Arizona: The Basin
Project (Basin East Project and Basin West Project) and the San Domingo
Project.

The Basin East Project has a Measured Mineral Resource of 20 Mt at an
average grade of 929 ppm Li for a total of 99 kt LCE and an Indicated
Mineral Resource of 122 Mt at an average grade of 860 ppm Li and an
Inferred Mineral Resource of 499 Mt at an average grade of 810 ppm Li for a
total of 2.81 Mt LCE
(https://www.accesswire.com/883697/bradda-head-lithium-ltd-announces-updated-mineral-resource-expansion-basin-project).
The Group intends to continue to develop its three phase one projects
in Arizona, whilst endeavoring to unlock value at its other prospective
pegmatite and brine assets in Arizona, Nevada, and Pennsylvania. All of
Bradda Head's licenses are held on a 100% equity basis and are in close
proximity to the required infrastructure. Bradda Head is quoted on the AIM of
the London Stock Exchange with the ticker of BHL.

Nominated Advisor

Beaumont Cornish Limited ("Beaumont Cornish") is the Company's Nominated
Adviser and is authorised and regulated by the FCA. Beaumont Cornish's
responsibilities as the Company's Nominated Adviser, including a
responsibility to advise and guide the Company on its responsibilities under
the AIM Rules for Companies and AIM Rules for Nominated Advisers, are owed
solely to the London Stock Exchange. Beaumont Cornish is not acting for and
will not be responsible to any other persons for providing protections
afforded to customers of Beaumont Cornish nor for advising them in relation to
the proposed arrangements described in this announcement or any matter
referred to in it.

Forward Looking Statements

This announcement contains forward-looking statements relating to expected or
anticipated future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and uncertainties, such
as general economic, market and business conditions, competition for qualified
staff, the regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties regarding
the timing and granting of prospecting rights, uncertainties regarding the
Company's ability to execute and implement future plans, and the occurrence of
unexpected events.  Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.

This announcement contains inside information for the purposes of the UK
Market Abuse Regulation and the Directors of the Company are responsible for
the release of this announcement.

 

 

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