The share price of ASX gold explorer Monger Gold Ltd (ASX: MMG) is being electrified on news the company has shaken hands on a lithium acquisition.
It's agreed to buy up to 100% of the US Scotty Lithium Project for what Monger chair Peretz Schapiro says is a "very modest upfront cost".
"Through development of the Scotty Lithium Project, as well as continuing to seek out additional accretive acquisitions, [Monger] intends to become a significant player in the lithium market," Schapiro continued.
At the time of writing, the Monger share price is 44 cents, 57.14% higher than its previous close.
However, earlier today the company's stock surged to 60 cents – representing a 114% gain.
Let's take a closer look at the ASX gold stock's new lithium venture.
ASX gold share to take on lithium project
The Monger share price is launching to a new all-time high on Tuesday following news it's breaking into lithium exploration.
The ASX gold share has agreed to acquire up to 100% of American Consolidated Lithium (ACL) – an entity with rights to buy 700 unpatented placer mining claims.
Those claims make up the Scotty Lithium Project, covering approximately 14,000 acres in southern Nevada.
Monger has agreed to pay $2 million upfront for the acquisition of ACL.
"The majority of the consideration [is] contingent upon the delineation of a significant JORC Resource of up to 500Mt at a grade of at least 1,000 parts per million [of] lithium," Schapiro said.
"This would be a very large resource – which illustrates the considerable upside of this acquisition."
The project is located 70 kilometres from the US's only lithium-producing mine and 330 kilometres from Tesla's Nevada Gigafactory.
The $2 million upfront payment will be paid via scrip, with eight million Monger shares offered at 25 cents apiece. The company will also provide four million options exercisable at 30 cents.
That will buy it 80% of ACL. The remainder can be purchased in two considerations of 10% each, upon certain exploration milestones.
Additionally, ACL can purchase the Scotty Project in five annual instalments, totalling US$170,000 cash. The first – worth $US$20,000 – is due on 30 June 2022.
The current claim owner will retain a 1% net smelter return royalty for the project. ACL can buy 0.5% of the net smelter return at any time for US$500,000.
The ASX gold share expects to begin explorations at the lithium project shortly.
It's planning for soil sampling to begin in June. It's also expecting to kick off a minimum 3,000 metre drilling program in the September quarter.
Monger share price snapshot
Today's gains have boosted the Monger share price further into the long-term green.
Right now, the company's stock is trading for 117.5% more than it was at the start of 2022. It's also 60% higher than it was at its first close on the ASX in June 2021.
