London-listed exploration and development company, Aterian, saw a rise in shares on Tuesday following the announcement of an earn-in investment and joint-venture agreement. Under this agreement, Aterian will explore and develop lithium and lithium by-products at its HCK project in Rwanda.
Partnership with Rio Tinto Mining and Exploration
Aterian signed the agreement with Rio Tinto Mining and Exploration and Kinunga Mining. Rio Tinto has the option to invest up to $7.5 million in two stages, allowing them to earn a 75% interest in the license to explore for minerals. In addition, Rio Tinto will make cash payments totaling $300,000 to reimburse Aterian for previous operational expenses.
Payment Details and Net Smelter Return
Upon satisfactory due diligence by Rio Tinto, an initial payment of $200,000 will be made, with an additional $100,000 payment due at the start of stage 2. Furthermore, Aterian has granted Rio Tinto a 2% net smelter return over the project, capped at $50 million. This return will be due by the future joint venture between Rio Tinto and Kinunga.
Exclusivity Option for Future Investments
In addition to the current agreement, Rio Tinto has an exclusivity option to invest in Aterian’s other two projects in Rwanda.
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