Mineral Resources (ASX:MIN) share price gains on new lithium partnership

ASX lithium shares remain in the spotlight amid a forecast boom in electric vehicle production.

| More on:
Three miners stand together at a mine site studying documents with equipment in the background

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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%.

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.

More on Resources Shares

Miner looking at a tablet.
Mergers & Acquisitions

Alumina shares leap 8% on Alcoa takeover bid

ASX 200 investors are sending the Alumina share price soaring following confirmation of Alcoa’s takeover intentions.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Here's the BHP dividend forecast through to 2026

This miner is committed to paying appealing dividends.

Read more »

View from below of a man with a shovel standing by a hole he has dug in the garden, with blue sky in the background.
Resources Shares

Here's why I'm steering clear of Core Lithium shares

Lithium has bottomed out over the past year, but here's why this is NOT the bargain stock to buy.

Read more »

Two miners examine things they have taken out the ground.
Resources Shares

Better buy: Fortescue or BHP shares?

Let’s dig into the potential of these two mining heavyweights.

Read more »

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Everything you need to know about the Rio Tinto dividend

Shareholders are getting a big dividend.

Read more »

A miner in a hardhat makes a sale on his tablet in the field.
Resources Shares

Buy this ASX stock for 'the best lithium mine in the world'

The experts at Blackwattle reckon the battery material will come back into vogue soon, and these are the shares to…

Read more »

Miner looking at a tablet.
Resources Shares

The Fortescue share price is down almost 10% in February, time to buy?

Is this an opportunistic time to buy the miner?

Read more »

Two miners standing together.
Resources Shares

2 battered ASX mining shares to buy for cheap right now

The global economy is set to improve in the coming year. That's why one expert is seeing a huge 58%…

Read more »