This comes following the announcement of a joint venture agreement with S&P/ASX 200 Index (ASX: XJO) lithium share and diversified resources producer Mineral Resources Ltd (ASX: MIN).

Shares in the small-cap lithium explorer closed on Monday trading for 16 cents.

In earlier trade today shares were swapping hands for 31 cents apiece, up a whopping 94%. After some likely profit-taking, shares are trading for 27 cents at the time of writing, up 67%.

Any guesses?

If you said Dynamic Metals Ltd (ASX: DYM), go to the head of the virtual class.

Here's why investors are sending the ASX lithium stock flying higher today.

Dynamic Metals shares surge on deal with Mineral Resources

The Dynamic Metals share price is off to the races after the company reported on a binding joint venture and farm-in agreement with HoldCo, a 100% owned subsidiary of Mineral Resources.

Subject to the satisfaction of certain conditions, the agreement will see the ASX lithium stock sell 40% of its lithium mineral rights at the Widgiemooltha tenement package for $5 million.

On completion, Mineral Resources (via HoldCo) and Dynamic will form a 40% / 60% unincorporated joint venture.

Mineral Resources has the right to increase its stake to 65% by sole funding an additional $15 million of exploration over the four years following completion of the agreement.

The deal only relates to lithium. Dynamic Metals will retain the rights to all other minerals at the project.

The agreement will see Mineral Resources pay $400,000 straight off as a signing fee with an additional $3.6 million in cash on completion. The remaining $1 million will be paid on 1 July 2025.

The companies anticipate the deal to be completed in the second quarter of 2024.

Commenting on the agreement sending the ASX lithium stock rocketing today, Dynamic Metals managing director Karen Wellman said:

The Widgiemooltha Project is a regionally significant tenement package that has yet to be fully assessed for its lithium potential. Although we have had some encouraging results with our first pass exploration activities, the sheer size of the Project means that it would likely have taken Dynamic many years and considerable expenditure to assess its potential and realise value…

The initial consideration will be used to advance exploration of our pipeline of new projects, whilst lithium exploration at Widgiemooltha is expected to generate considerable news flow, both short and medium term.

How has the ASX lithium stock been tracking?

With today's intraday gains factored in the ASX lithium stock is well into the green in 2024.

Since the closing bell on 28 December (the last day it traded in 2023), the Dynamic Metals share price is up 86%.

The post Guess which ASX lithium stock just surged 94% on a deal with Mineral Resources appeared first on The Motley Fool Australia.