It has been a very positive day of trade for lithium miners Galan Lithium Ltd (ASX: GLN) and Lithium Australia NL (ASX: LIT) on Thursday.
In morning trade, the Galan Lithium share price is up 16% to 44 cents and the Lithium Australia share price is up 9.5% to 8.1 cents.
Why are these lithium miners storming higher today?
This morning Lithium Australia announced that it has entered into an acquisition and joint venture agreement with Galan Lithium.
This agreement with see Galan Lithium purchase an 80% interest in the Greenbushes South Lithium Project from Lithium Australia.
The Greenbushes South Lithium Project is located 200 km south of Perth and just 3 km south of the world-class Greenbushes Lithium Mine.
The latter is owned and operated by Talison Lithium and is one of the world's largest hard-rock spodumene deposits with very high grades. IGO Ltd (ASX: IGO) recently bought a 25% stake in the operation to much fanfare.
According to the release, Galan Lithium will issue Lithium Australia 1,221,000 fully paid ordinary shares in exchange for the 80% stake in the Greenbushes South Lithium Project. The two companies will then form an unincorporated joint venture, which will be solely funded by Galan Lithium until the completion of a preliminary feasibility study.
After which, both parties will contribute on a pro-rata basis or withdraw and retain a 2% net smelter royalty.
Management commentary.
Galan Lithium's Managing Director, Juan Pablo Vargas de la Vega, commented: "We are delighted to acquire a significant majority stake in a highly prospective lithium project in a world-renowned lithium district and increase our existing lithium exploration ground at Greenbushes in Western Australia."
"We have secured an outstanding exploration opportunity in Western Australia to add to our existing portfolio of assets in Argentina that have a potential production profile. We will proceed to exploring this tenure in a methodological step-by-step manner and progress tenement applications to grant. We are pleased to joint venture with Lithium Australia NL and look forward to updating the market with our developments in due course," he added.
Lithium Australia's Managing Director, Adrian Griffin, added: "The Company's divestment of a majority interest in the Greenbushes South Lithium Project to Galan is consistent with our ongoing strategy, to advance proprietary, downstream lithium and battery technologies and to deliver an ethical and sustainable supply of energy metals for batteries through innovative minerals processing and battery recycling techniques, thus creating an energy-metals loop."
"Lithium Australia is pleased to partner with Galan, a dedicated explorer that will drive the Greenbushes South Lithium Project forward. This transaction means that the Company reduces its financial commitment and exploration risk yet retains significant lithium commodity exposure by way of both Galan shares and 20% Project equity," Griffin concluded.
