American Pacific Borate & Lithium Ltd (ASX:ABR) has increased the size of its borate and lithium exploration projects in the US state of Nevada with the vendor agreeing to transfer 168 additional claims.
Transfer of the Salt Wells North and Salt Wells South projects brings the total project area of Salt Wells to 36 square kilometres and connects the company’s properties.
American Pacific is expected to begin the initial exploration program this quarter targeting high-grade boron and lithium.
No modern exploration conducted
American Pacific CEO Michael Schlumpberger said the additional 13.6 square kilometres fell under the company’s existing earn-in agreement and remained consistent with its objective to become a globally significant producer of borates.
He said: “The Salt Wells borate and lithium exploration projects contain a lot of unique characteristics of boron and lithium discoveries worldwide, including an arid climate, a closed basin containing a playa (dry lake bed) and suitable source rocks.
“Aside from salt surface sampling that recorded some very high-grade results (up to 810ppm lithium and over 1% boron), no modern exploration has been conducted on the project area.
“The consistently strong lithium and boron grades across the surface salt samples make this a very exciting opportunity in a global lithium and boron context that now has a lot more scale.”
Drilling to commence this quarter
The company’s initial exploration program will include 16 kilometres of magnetotellurics lines to determine basin structure and detect if brines are present in the basin.
This will be followed up by six shallow drill holes to determine the upper sediments and sampling of any intercepted brines.
Under the terms of the earn-in agreement, American Pacific may spend US$3 million on the projects over a 5-year period, with modest expenditure commitments required in the first two years.
The company is also required to pay all claim related expenditure which is estimated to be US$500,000 over the 5-year period.
Once in production, American Pacific will be required to make a one-off payment of US$1 million and an ongoing royalty of 3% of gross revenues.