The Mineral Resources Ltd (ASX: MIN) share price was jumping between red and green in early morning trade. It now looks to have found some direction.
At time of writing, shares in the S&P/ASX 200 Index (ASX: XJO) miner are up 1.47%.
The broader ASX 200 is under pressure today, down 0.22%, following a selloff in US markets over renewed fear of the Omicron COVID variant, along with a dash of inflation angst.
Below, we take a look at the lithium development partnership that looks to drawing ASX investor interest in Mineral Resources shares.
What lithium development partnership was announced?
The Mineral Resources share price is in the green after gold miners Pantoro Ltd (ASX: PNR) and Tulla Resources PLC (ASX: TUL) – its 50% Norseman Gold Project joint venture (JV) partner – reported on a binding agreement with Mineral Resources to seek and develop lithium deposits in a joint venture across their project.
According to the agreement, Mineral Resources will spend a half million dollars within the first 6 months and another $2.5 million inside the next 18 months, taking its expenditure to at least $3 million within the first 2 years.
The company will also conduct a feasibility study including definition of a JORC compliant resource in those 2 years. That will see Mineral Resources earn 25% of the lithium rights within the Norseman Gold Project tenure. It can earn another 40% of the lithium rights, bringing its ownership to 65%, by funding the project until first production.
Commenting on the partnership with Mineral Resources, Pantoro's managing director Paul Cmrlec said:
This new partnership is an outstanding outcome for Pantoro to maximise the value of a key mineral asset at Norseman. The agreement allows us to progress without any distraction from our core business of gold development and mining, while maximising value for our shareholders.
Mineral Resources is a development and production focussed company with an excellent track record and reputation. Pantoro has every confidence that Mineral Resources will ensure the successful development of the lithium assets. We look forward to rapidly generating drilling results from the highly prospective Buldania tenements.
Mineral Resources will be the manager of the new JV and be responsible for all expenses until first production begins.
The companies said drilling will start as soon as possible.
Mineral Resources share price snapshot
The Mineral Resources share price has gained 31% this year, outpacing the roughly 10% year-to-date gains posted by the ASX 200.
Over the past month, shares in Mineral Resources are up 23%.