Shares in Australian minerals explorer Lithium Australia NL (ASX: LIT) are jumping higher during today's session following an update to its joint venture with soon-to-be listed Charger Metals this morning.
At the time of writing, the Lithium Australia share price is climbing 10% to 11 cents.
What was announced?
The Lithium Australia share price is having a bumper day after the company advised it has progressed its joint venture with Charger Metals, announcing that the terms of the venture are now unconditional.
Charger has exercised an option to acquire a 70% interest in three battery metals assets on Lithium Australia's balance sheet. These interests include the company's projects at Coates, Lake Johnston and Bynoe.
Under this arrangement, Lithium Australia will retain a 30% free carried interest in the projects, and will also be the major shareholder in Charger Metals.
The company will also receive $100,000 in cash and 9.6 million fully paid ordinary shares in Charger Metals, with a valuation of $1.92 million.
Lithium Australia reports that the Charger Metals "$6 million offer closed oversubscribed and has received conditional approval to list from the ASX". It is scheduled to list on the ASX on 8 July.
In the announcement, Lithium Australia managing director Adrian Griffin stated:
Lithium Australia retains significant exposure to raw materials through its equity in Charger, as well as its free-carried project interests. The latter potentially provide access to raw materials that the Lithium Australia group of companies can further process. Charger Metals' specialised expertise will expedite a focused exploration effort, leaving Lithium Australia to concentrate on its core business: the ethical and sustainable supply of energy metals to the battery industry and the development of a circular battery economy. We eagerly await exploration outcomes at the Coates, Bynoe and Lake Johnston projects.
Charger Metals is in preparation for its ASX debut, having completed an oversubscribed initial public offering (IPO) last month. The company may trade under the ticker CHR, judging by its prospectus.
Lithium Australia shareholders received priority access to the IPO, with the option to subscribe for up to $500,000 worth of Charger shares at 20 cents per share.
Lithium Australia share price snapshot
Following today's gains, the Lithium Australia share price has increased by 4.76% over the previous 5 trading sessions.
The company's shares are also up almost 67% this year to date, which has outpaced the broad Australian indexes over this time period.
At a share price of 11 cents, Lithium Australia has a market capitalisation of almost $100 million and is trading at more than double its 52-week low of 4.5 cents.
