Surge Battery Metals (TSXV: NILI) is set to enter a joint venture on their flagship project, the Nevada North Lithium Project. The company as of this morning has entered a letter of intent with the ASX-listed Evolution Mining for a joint venture that would fund the continued development of the project.
Under the terms of the letter of intent, Evolution Mining would take a 23% interest in the project, with the initial focus to be the completion of a preliminary feasibility study for the proposed development of Nevada North. Surge is expected to contribute all mineral claims and mineral rights that comprise the Nevada North project to the joint venture, while Evolution will contribute their 75% mineral interest in a 880-acre private land portion within the Nevada North project, alongside 21,000 acres of private land in and around the current project.
The additional claims being contributed by Evolution are said to consist of highly prospective claims to the south of the main claim block, while also covering possible extensions of the clay units to the north.
As part of the JV effort, Evolution Mining is expected to increase its interest up to 32.5% via the funding of the prefeasibility study, to a maximum of $10 million. Any expenses beyond that $10 million mark will be jointly funded by Evolution and Surge on a pro rata basis. Provided the funding is completed in full, Surge would retain a 67.5% interest in the venture, while continuing to operate the project so long as they maintain a 50% interest.
The LOI is said to be conditional on Surge raising $3.0 million via a private placement, and the completion of due diligence by each party. Surge is also expected to grant Evolution a legally binding exclusivity period.
“This collaboration not only combines relevant assets, but also the strong lithium technical knowledge of Surge with Evolution’s proven track record in mine development and operational excellence. Together we are well positioned to unlock the full potential of this highly prospective lithium asset and contribute to the growing demand for critical battery metals,” commented Surge CEO Greg Reimer on the arrangement.
Surge Battery Metals last traded at $0.295 on the TSX Venture.
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