Jadar Resources (ASX:JDR) share price rockets 24% on new lithium deal

ASX investors are closely following developments in the lithium space.

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The Jadar Resources Ltd (ASX: JDR) share price is surging in intraday trade, up 24.07% at time of writing.

This gain comes even as the All Ordinaries Index (ASX: XAO) is under pressure, down 0.53%.

Below we look at the lithium partnership announced this morning that looks to be driving ASX investor interest in the junior resource explorer.

What lithium partnership was announced?

The Jadar Resources share price is off to the races after the company reported it has signed a non-binding Memorandum of Understanding (MOU) with Yahua International Investment and Development to acquire and develop lithium projects and supply spodumene concentrates globally.

Yahua is a subsidiary of Chinese listed Sichuan Yahua Industrial Group Co Ltd (SHE: 002497), one of China’s major lithium hydroxide and lithium carbonate producers.

The MOU would see Jadar and Yahua enter into a strategic partnership agreement within 6 months. If that goes through, Jadar will sell 100% of the lithium concentrate from its lithium projects to Yahua.

Yahua also has been offered an equity stake of up to 80 million shares in Jadar for 4.5 cents per share. That’s some 35% below the current Jadar Resources share price of 7 cents. If Yahua opts to invest in shares, the MOU stipulates that Jadar will only use the additional funds to explore for and develop lithium projects.

Commenting on the partnership, Jadar Resources’ executive director, Adrian Paul said:

I am extremely excited to progress this MOU and strategic partnership with Yahua. The EV and lithium markets have seen substantial growth over the past year as global adoption of EV technologies starts to materialise. The MOU provides a potential mechanism for both the development of our current lithium assets as well as an avenue for further growth in the portfolio through acquisition.

Jadar Resources share price snapshot

The Jadar Resources share price is up 168% in 2021. For some context, the All Ords is up 10% year-to-date.

Over the past month, Jadar’s shares have gained 72%.

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The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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