Andrada Mining has signed a three-stage earn-in agreement with the Sociedad Química y Minera de Chile SA’s subsidiary SQM Australia (Pty) Ltd to develop the Lithium Ridge asset under licence 133.
SQM is a global company listed on the New York Stock Exchange and the Santiago Stock Exchange.
Lithium Ridge is now under Grace Simba Investments (Pty) Ltd, a new Uis Tin Mining Company Limited subsidiary.
Andrada Mining owns the Uis Tin Mining Company.
Lithium Ridge is a fully permitted mining licence covering an area of approximately 3,300 ha and located approximately 35 km from Uis Mine.
It hosts multiple pegmatites with mineralisation, including lithium (spodumene dominant), tin and tantalum.
Under the agreement, SQM can earn into Grace Simba Investments by funding the exploration and a definitive feasibility study.
The SQM agreed to pay Andrada Mining a US$500,000 participation fee on signing and a further US$1.5 million upon satisfaction with the conditions.
In addition, SQM can invest US$20 million over three and a half years, in different stages, to earn 40% ownership of Grace Simba Investments.
Subsequent funding of the definitive feasibility study will enable SQM to attain up to 50% ownership.
SQM will also pay a one-off success fee should Andrada complete a JORC (2012) compliant mineral resources estimation exceeding 40 million tonnes during the third earn-in period.
The fee will be calculated based on the resource’s lithium oxide content percentage.
Andrada Mining will manage and operate the project during the earn-in period, and the parties will create a joint development committee to oversee the development of Grace Simba Investments.
The joint development committee will be constituted of an equal representation of SQM and Andrada management members.
The deal is subject to conditions precedent, including the Namibian Competition Commission approval, as detailed below.
Andrada Mining CEO Anthony Viljoen said the partnership solidifies the belief in the Lithium Ridge asset as a potential world-class resource and further establishes Andrada as a multi-asset, polymetallic explorer and miner.
He said partnering with SQM provides the ideal partner to unlock the full potential of Lithium Ridge while allowing the 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 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,” Viljoen said.
According to Viljoen, introducing 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.
SQM International CEO Mark Fones said the agreement’s completion confirms our commitment to 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,” Fones said.
