Guess which ASX mining stock is rocketing on deal with lithium giant SQM

The two parties are looking at a potentially significant lithium project in Europe.

| More on:
a woman smiles as she checks her phone in one hand with a takeaway coffee in the other as she charges her electric vehicle at a charging station.

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

Talga Group Ltd (ASX: TLG) shares are having a strong finish to the week.

In afternoon trade, the ASX mining stock is up 13.5% to 64.5 cents.

Why is this ASX mining stock surging?

Investors have been fighting to get hold of the battery materials and technology company's shares following the release of a big announcement.

According to the release, Talga has entered into an earn-in agreement with lithium giant Sociedad Quimica y Minera de Chile S.A. (NYSE: SQM). This agreement is for Talga's Aero Lithium Project in Sweden.

Under the binding agreement, Talga has granted SQM the right to sole fund exploration expenditure of up to US$19 million over the next seven years. This will give the Chilean lithium miner the rights to earn up to a 70% ownership interest in the Aero project. This is subject to Swedish foreign direct investment clearance.

In addition, Talga will also be paid a management fee for each stage of the potential earn-in arrangement, and a success fee if a decision to mine on Aero is made. Talga retains all rights and obligations in relation to graphite minerals within Aero.

The release also notes that SQM has completed extensive due diligence on Aero. This includes site visits, so it clearly likes the look of the project.

And this may not be the only project that the two parties work together on. Under the agreement, they may agree to collaborate on potential new lithium areas and projects in Sweden.

'Aero might be significant'

Talga's managing director, Mark Thompson, notes that the project could be significant for the European market. He commented:

We are delighted to partner with SQM on our Aero lithium project in Sweden, which provides an important chance to build a European lithium supply for the green transition and EU localisation objectives. As one of the few potentially large-scale lithium hard rock opportunities in Europe, Aero might be significant to the region's battery and electric vehicle industry.

This sentiment was echoed by the CEO of the SQM International Lithium division CEO, Mark Fones. He commented:

We are pleased to enter into this agreement, which represents our dedicated efforts to build a global and competitive lithium asset portfolio. Expanding into new and promising jurisdictions, such as Sweden, has been a strategic goal for us, and partnering with Talga, who has demonstrated expertise in the region, further enhances this achievement.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Scott Phillips.

More on Materials Shares

A person with a round-mouthed expression clutches a device screen and looks shocked and surprised.
Materials Shares

Small-cap ASX lithium stock rockets 115% on new discoveries

What is getting investors excited today? Let's find out.

Read more »

Miner looking at a tablet.
Materials Shares

South32 share price crashes 10% on FY25 guidance downgrade

How did this mining giant perform in the fourth quarter and what is next?

Read more »

A female worker in a hard hat smiles in an oil field.
Materials Shares

How much could $10,000 invested in Rio Tinto shares be worth next year

Let's see what this broker is forecasting for the miner's shares.

Read more »

A man looking at his laptop and thinking.
Materials Shares

What's happening with Lake Resources shares today?

Lake Resources is eyeing technology improvements to help cut costs.

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.
Dividend Investing

How big will the BHP dividend be in 2025?

Let's see if the mining giant will be rewarding shareholders with more generous dividends.

Read more »

Three miners stand together at a mine site studying documents with equipment in the background
Materials Shares

Fortescue share price falls after cost-cutting decision

The mining giant is cutting down its workforce materially to save money.

Read more »

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

Could BHP shares provide an 18% return for investors?

Let's see what Goldman Sachs is saying about this mining giant following its update.

Read more »

Two young risk-taking men pose for the camera as they jump off a cliff into the sea.
Materials Shares

How risky is buying ASX lithium shares right now?

Despite recent losses, this fund manager is holding onto these top ASX lithium stocks. Here’s why.

Read more »