London-listed Alba Minerals Ltd. (LON:ALBA) signed a definitive property option agreement with Noram Ventures Inc. (CVE:NRM) on Wednesday to acquire up to 50% of Noram's wholly-owned subsidiary, Green Energy Resources Inc., which holds lithium brine/clay claims at Clayton Valley, Nevada, and the Hector lode claims in San Bernardino county, California.
Clayton Valley lithium project
Green Energy has amassed one of the largest land packages in Nevada's Clayton Valley. Its non-contiguous north and south blocks now total 888 claims (17,738 acres) and are positioned both north and south of Albemarle Corp.'s Silver Peak mine, North America's only lithium producer.
The perimeter of the Clayton Valley claims is located within one mile (1.6 kilometres) of Albemarle's operations, where lithium is produced from deep wells that pump brines from the basin beneath the Clayton Valley playa. The plant is the only lithium producer in the United States and has been producing lithium at this location continuously since 1967.
Hector lode lithium project
The agreement also includes the 100%-owned Hector lode property encompassing 116 lithium mineral claims (2,320 acres) in San Bernardino county, California, where surface sampling has confirmed the presence of lithium in hectorite clays. Material is currently being mined on adjacent ground as bentonite/hectorite clays. An initial core drilling program is now under consideration for the property.
Terms of the option agreement
In order to keep the option in good standing and in force and effect, Alba shall, subject to exchange and regulatory approval:
- Make mandatory payments in the aggregate of $255,000 to Green Energy on completion of the phase 1 drilling program in Clayton Valley to earn a 25% interest in the claims. For greater certainty, this payment is an obligation and not optional and upon payment of the said amount Alba will become the owner of the said 25% interest without having to give exercise notice;
- Make a certain second payment of $200,000 to Green Energy on or before March 30, 2017, or at such time as the National Instrument 43-101 technical report on the phase 1 drilling results is completed, whichever is later, to earn an additional 5 per cent for a total 30-per-cent interest in the claims;
- Make a third payment of $200,000 to Green Energy on or before May 30, 2017, in order earn an additional 5 per cent for a total 35-per-cent interest in the claims;
- Make a fourth payment of $289,500 to Green Energy on or before Aug. 25, 2017, in order to earn an additional 10 per cent for a total 45-per-cent interest in the claims;
- Make a fifth payment of $155,500 to Green Energy and issue an aggregate of one million shares of Alba to Noram on or before Nov. 30, 2017, in order to earn an additional 5 per cent for a total and maximum 50-per-cent interest in the claims.