Larvotto Resources (ASX:LRV) reports it has secured US$3.4 million through signing of a royalty, equity, and offtake agreement (REO agreement) with Canadian-based Lithium Royalty Corp (LRC) and Waratah Capital’s Electrification and Decarbonization Fund.
The REO agreement with LRC represents a $3.4 million, three-tiered deal, comprising 2 $700,000 cash payments by LRC for a 1% gross revenue royalty over lithium and all other pegmatite materials and for a 20% off-take investment, including a $2 million cornerstone equity investment.
The funds received will be directed towards expediting lithium exploration at the Merivale lithium prospect and the greater Eyre Project.
Recent soil geochemistry results and surface mapping has highlighted several anomalous lithium zones, as announced by Larvotto earlier this month.
Commenting on the REO agreement, Larvotto Resources Managing Director, Ron Heeks, said: “Bringing a substantial North American institutional fund onto the register is a huge vote of confidence in our assets and management and will enable the company to accelerate its lithium exploration at the Merivale prospect and other areas within the Eyre Project well beyond what was initially planned on listing.
This working capital injection significantly improves our balance sheet and enables Larvotto to confidently progress our various drill programs into 2023.
“This working capital injection significantly improves our balance sheet and enables Larvotto to confidently progress our various drill programs into 2023”
$3.4 million from a highly experienced lithium investor such as Lithium Royalty Corp and the Waratah Capital managed E&D Fund, is a strong endorsement of the exciting lithium potential demonstrated so far at our Eyre Project in WA.”
Larvotto also notes that if the conditions are not all satisfied by 7th December this year, either party has the right to terminate this agreement by notice in writing to the other party, however the rights of the parties regarding the royalty shall be intact.
Larvotto Resources is an ASX-listed company who is actively exploring its portfolio of projects, including its Mt Isa copper, gold, and cobalt project adjacent to the township of Mt Isa in Queensland, as well as its Eyre multi-metals and lithium project located about 30km east of the township of Norseman in Western Australia.
The Eyre project covers part of the north-east trending crustal-scale suture zone between the Yilgarn Craton to the north and the Albany Fraser Orogen to the south, covering a total land area of about 690km-square.
With the REO Agreement now signed, Larvotto Resources announces it will progress with its various drill programs into 2023.
Images: Larvotto Resources Ltd