Alchemy Resources and JOGMEC Enter Joint Venture for Lithium Exploration
ALY (ALY) Share Update September 2024 Sunday 29th
Alchemy Resources Signs Lithium JV with Japanese Government Agency JOGMEC
Alchemy Resources Limited (ASX: ALY) has announced a significant joint venture agreement with Japan Organization for Metals and Energy Security (JOGMEC) to explore lithium deposits at Roe Hills in Western Australia.
Instant Summary:
- Alchemy and JOGMEC sign Farm-in and Joint Venture agreement.
- JOGMEC can earn a 51% interest by spending $6 million by March 2029.
- Initial minimum expenditure of $600,000 by March 2025.
- Alchemy will manage exploration during the farm-in period.
- JV subject to Australian Foreign Investment Review Board (FIRB) approval.
Details of the Agreement
Alchemy Resources Limited (ASX: ALY) has entered into a Farm-in and Joint Venture agreement with the Japan Organization for Metals and Energy Security (JOGMEC). This agreement allows JOGMEC to earn up to a 51% interest in the Roe Hills tenure by funding up to $6 million in exploration expenditures by March 2029.
The Roe Hills area, part of Alchemy's Karonie Lithium and Gold Project, is considered highly prospective for lithium, similar to the neighboring Manna lithium deposit owned by Global Lithium Resources (ASX: GL1).
Farm-in Period and Expenditure
JOGMEC's farm-in period is staged over five phases, with a minimum expenditure of $600,000 required by March 2025. The subsequent phases require cumulative expenditures of $1.8 million by March 2026, $3 million by March 2027, $4.5 million by March 2028, and $6 million by March 2029. JOGMEC may accelerate these expenditures at its discretion.
Upon completion of the farm-in period, both Alchemy and JOGMEC can elect to contribute to future funding proportionally. If a party's ownership is diluted below 10%, it will convert to a 1% Net Smelter Royalty.
Exploration Management and Conditions
Alchemy will manage the exploration activities during the farm-in period. The joint venture remains subject to FIRB approval, ensuring compliance with Australian regulations.
About Roe Hills Prospects
The Roe Hills area lies along a structural trend from the Manna Lithium deposit, which has significant lithium potential. Geological surveys and soil sampling have identified multiple lithium anomalies, indicating a promising exploration target.
This joint venture is a positive development for Alchemy Resources, providing substantial funding for lithium exploration. The partnership with JOGMEC, a reputable Japanese government agency, adds credibility and potential for successful resource development. This could positively impact Alchemy's stock, attracting investor interest in the company's lithium prospects.
Investor Reaction:
Analysts are likely to view this partnership favorably, given JOGMEC's track record and the significant funding commitment. The phased expenditure plan mitigates risk while providing a clear path for exploration. Investor sentiment may improve as Alchemy advances its lithium exploration efforts.
Conclusion:
Investors should keep an eye on the progress of the joint venture and the results of the exploration activities at Roe Hills. This partnership with JOGMEC could unlock significant value for Alchemy Resources and its shareholders. Stay informed on further developments and potential impacts on your investment portfolio.