The Piedmont Lithium Inc (ASX: PLL) share price is on the move on Thursday.
In morning trade, the lithium miner's shares are up 3.5% to 57 cents.
Why is the Piedmont Lithium share price storming higher?
Investors have been snapping up Piedmont Lithium shares today after the company announced a strategic investment.
According to the release, the company has agreed to pay C$2 million for a 19.9% equity interest in Vinland Lithium Inc.
Management also advised that the company may earn up to a 62.5% equity interest in Killick Lithium Inc, which is a wholly-owned subsidiary of Vinland Lithium. It holds a 100% interest in the Killick Lithium Project in Newfoundland, Canada.
The Killick Lithium Project's large land package hosts ~60km of highly prospective strike length and initial exploration results have been encouraging.
In addition, Piedmont will be entitled to 100% marketing rights and a right of first refusal on 100% offtake rights to any lithium concentrate produced by the project on a life-of-mine basis at competitive commercial rates.
Why is it making the acquisition?
Piedmont Lithium's chief operating officer, Patrick Brindle, highlights that the partnership will support the company's strategy of growing its hard rock lithium resource base and plans to be a major producer of lithium hydroxide for the North American market. Brindle commented:
The Killick Lithium Project comprises a vast land package in an attractive jurisdiction. Our team has visited the site on multiple occasions and conducted extensive due diligence. Early exploration results are favorable, and the Project's location is advantageous in terms of infrastructure and logistics," said Brindle. "The Vinland Lithium exploration team is highly experienced and will manage all aspects of the exploration program.
While we help fund exploration activities at Killick Lithium, our projects and operations teams remain focused on the ongoing development of our core portfolio, including the producing North American Lithium mine in Quebec and our planned operations in Ghana, Tennessee, and North Carolina.
The Piedmont Lithium share price remains down by almost one-third over the last 12 months.