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Key Points
- Zenith share price powers to all-time high of 41 cents
- Joint venture with Saudi battery chemicals and technology company
- Zenith plans to spinoff existing gold and base metals assets on ASX
The Zenith Minerals Ltd (ASX: ZNC) share price is exploding to a record high today. This comes after the company announced a major new joint venture to unlock lithium potential at its wholly-owned assets.
At the time of writing, the lithium miner's shares are swapping hands for 36 cents apiece, up 24.14%. It's worth noting that during market open, the company's shares moved into uncharted territory, reaching 41 cents.
Zenith eyes potential lithium gains
In its release, Zenith advised that it will partner up with EV Metals Group (EVM) to explore for lithium from its Western Australian projects. This relates to the company's wholly-owned Waratah Well and Split Rocks assets.
Under the agreement, EVM will provide financial backing by spending a minimum of $7 million on exploration activities on the projects. This will run for a 24-month period, and either party is able to bring additional projects to the joint venture.
EVM may earn a 60% interest in the lithium rights by solely funding the feasibility study. Zenith would retain a 40% project share across the Waratah Well and Split Rocks projects.
As such, EVM will subscribe for 20 million ordinary Zenith shares at a price of 30 cents per share. This represents a premium of 20% above the volume-weighted average price for the last 10 business days.
The $6 million raised will be allocated to sourcing new lithium opportunities, and advancing Zenith's gold and base metals assets. However, Zenith is planning to demerge these assets into one or more new listed entities on the ASX. This will allow the company to double down on its efforts in progressing its lithium pathway.
What did management say?
Zenith CEO, Michael Clifford commented:
I am delighted that Zenith has been able to team up with EVM to unlock the lithium potential of its Split Rocks and Waratah Well projects. The arrangement goes much deeper than just the joint venture on these two existing Zenith projects, Split Rocks and Waratah Well, with the parties also agreeing to jointly assess new lithium/ EV-metal opportunities throughout Australia where commercially appropriate to do so.
The new joint venture arrangement plays to the project generation strengths of the Zenith team, matching this up with the very strong commercial and engineering capability of the EVM group. The arrangement puts Zenith in a unique position to build a significant lithium business in conjunction with EVM"
Zenith share price summary
Over the last 12 months, the Zenith share price has leapt by more than 200% for shareholders. The company's shares reached an all-time high today of 41 cents.
Based on today's price, Zenith commands a market capitalisation of around $114.95 million with approximately 323.80 million shares on issue.
