Bradda Head signs off on LRC royalty deal
Bradda Head Lithium Ltd (AIM:BHL) said it completed its funding agreement with Lithium Royalty Corporation (LRC) following a site visit and completion of due diligence.
LRC is paying US$8mln for a 2% gross overriding royalty (GOR) over Bradda Head's sedimentary lithium claims in Arizona (Wikieup and Burro Creek) with the pegmatite and brine projects unencumbered.
Payment will be staged, with US$2.5mln on closing, US$2.5mln on confirmation of a one million tonne lithium resource at 800ppm and US$3mln when the resource reaches 2.5mln tonnes at the same grade.
LRC will also invest US$2mln directly into Bradda Head through a placing at 7.68p per share with a director of LRC investing a further US$0.5mln at the same price.
Bradda Head said the royalty payment would fund an early-stage technical study on the sedimentary claims in Arizona and also drilling, metallurgical testing, baseline studies and social outreach programmes.
The placing proceeds can be used to develop the pegmatite and brine projects.
Charles FitzRoy, Bradda Head’s chief executive, said: "We are delighted that we have now completed the Royalty Agreement.
"The importance of this investment cannot be understated for Bradda Head and will allow us to develop our sedimentary claims to an initial technical study level and progress our metallurgical test work without the need for further funds from the market for our clay assets.
“It also frees up company funds to push ahead aggressively with on our San Domingo pegmatite prospect located in Arizona enabling the company to be active on two major opportunities."
"LRC's stamp of approval reinforces what our geologists believe about the potential at Wikieup and Burro Creek. Work is underway at all our assets and significant news flow is coming."