MGX Minerals Inc (CNSX:XMG, OTCQB:MGXMF) is poised to acquire 50% of Chilean Lithium Salars SpA, which holds three prospective lithium exploration projects located in Chile.
The prospects include the Francisco basin, Laguna Brava and Laguna Escondida lithium projects.
To acquire its interest in Chilean Lithium (CLS), MGX has agreed to make option payments totalling US$1.5mln. The first US$100,000 portion of the option payments is payable in cash at the discretion of CLS while the remainder of options payments will be payable in MGX common shares.
MGX has agreed to incur exploration expenditures totalling US$2mln and also to complete an NI 43-101 resource estimate on at least one of the projects no later than 20 months after the effective date of the memorandum of understanding (MOU).
CLS's parent company will contribute an equal amount of expenditures to maintain its respective interest in CLS.
The closing of the transaction remains subject to due diligence.
Overview of CLS's projects
The Francisco basin lithium project is located 30 kilometres south of the Maricunga salt basin (salar), and is accessible via a regional highway and established tracks.
The lease area comprises 12,900 hectares.
Earlier this year, Chilean Lithium Salars Holdings completed a reconnaissance brine sampling at the project. This sampling confirmed the presence of lithium enrichment in the surface brines.
The Laguna Brava salar is geologically prospective for lithium brine, MGX said.
A historical sampling of surface brines indicated significant lithium enrichment. In December 2017, Chilean Lithium undertook a four-hole reconnaissance drilling program at a southern access point of the salar to investigate the deeper aquifer.
The Laguna Escondida project is located roughly 200 kilometres (km) east-northeast of the regional capital and is accessible via a provincial highway to within 10 to 15 km of the project.
Shares in MGX were up 7.6% at C$0.85 on the news.