Venus Metals Corporation and IGO have inked a binding agreement for exploration – and possibly development and extraction – at the pair’s Henderson nickel-lithium project in Western Australia’s Eastern Goldfields region.
The deal involves a farm-in and joint venture (JV) in which a subsidiary of IGO can progressively acquire up to a 70 per cent interest in the project by spending $4 million on exploration and reimbursing Venus with $1 million.
In a move likely to please Venus’ purse-string holders, IGO has promised to fund all expenditure for the JV until the completion of the project’s prefeasibility study (PFS). On completion of the PFS, IGO’s subsidiary will have the right to take Venus’ 30 per cent stake for a price based on fair market value, minus an apportioned aggregation of the expenditure incurred on the project to date.
Venus management has committed to continuing in an unincorporated JV should IGO decide not to acquire the remaining 30 per cent stake.
"We are thrilled to have cemented a further arrangement with IGO Limited regarding nickel and lithium exploration at our Henderson Project in an emerging combined nickel and lithium province following the discovery of significant spodumene near the historical Mt Ida Gold Mine located directly north from the Project. This follows a Farm-in/JV and Placement that occurred with IGO Limited last year in relation to the Bridgetown-Greenbushes exploration project located next to the World-Class Greenbushes Lithium Mine”. Venus Metals managing director Matthew Hogan
It is not the first time the duo has walked away happy from the negotiating table. In June last year, IGO Limited snapped up an interest in Venus Metals Corporation after acquiring nine million shares in the company and securing an exploration deal at its Bridgetown Greenbushes project in WA’s South West region.
In that deal – and after spending $2.07 million at 23c per share – IGO secured a 5.6 per cent stake in Venus, making it a substantial shareholder. The project takes in Venus’ Greenbushes East lithium project and its Bridgetown East copper-nickel-PGE project.
Demand expectations for nickel have cooled recently, although nickel usage is on track to register a healthy 6.1 per cent growth this year. However, analysts believe a global supply glut looms as production out of Indonesia continues unabated.
Meanwhile, lithium prices rebounded this week for the first time in five months after tumbling from record highs. But with new production coming online, prices are unlikely to overheat.
However, a decision by world No. 2 producer, Chile, to nationalise its lithium sector, may be a spanner lurking with intent in the vicinity of the works.
Battery-grade lithium carbonate prices in China rose 10.6 per cent to 182,500 yuan (AU$39,380) a tonne – the first weekly increase since November last year, according to data by Fastmarkets on Refinitiv Eikon.
That was when the price had surged 10-fold in less than two years to reach 605,000 yuan (AU$130,575), as supply failed to keep up with soaring demand due to robust EV sales.
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