Larvotto Resources Limited (ASX: LRV) has signed a Royalty, Equity and Offtake Agreement with Canadian-based Lithium Royalty Corp. (LRC) and Waratah Capital’s Electrification and Decarbonisation Fund AIE LP.
REO Agreement Summary
Binding agreement (subject to satisfaction of conditions precedent) signed with LRC as part of $3.4M, three-tiered deal:
• $700,000 cash payment by LRC for 1% gross revenue royalty over lithium and all other pegmatite materials (Material);
• $2M cornerstone equity investment and free attaching options; and
• $700,000 cash payment by LRC as consideration for a 20% offtake investment.
REO Agreement Details
Under the REO Agreement, the Purchaser has agreed to:
1. acquire a newly created 1% gross revenue royalty payable in relation to any lithium and other pegmatite related minerals extracted or sold by Larvotto from its Eyre Project for $700,000, (Royalty);
2. subscribe for 11,111,111 new ordinary shares (Share) at an issue price of A$0.18, plus one (1) free attaching option to raise A$2M (Equity Investment); and
3. acquire a 20% life of mine offtake right for lithium in any form including ore, concentrates, sulphates, chemicals and other pegmatite minerals that are located within or mined and other pegmatite related minerals extracted or sold by Larvotto from its Eyre Project for A$700,000.
Waratah Capital manages over CAD$4B in assets and is the founding sponsor of Lithium Royalty Corp. (taking $200,000 in the Equity Investment), which holds royalty investments in lithium explorers including Core Lithium and Sayona Mining. The remaining A$1.8M of the Equity Investment is being taken by Waratah Capital’s “Electrification and Decarbonisation Fund”.
“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,” Larvotto Resources’ Managing Director, Ron Heeks, said.
“This working capital injection significantly improves our balance sheet and enables Larvotto to confidently progress our various drill programs into 2023.
“A$3.4M 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.”
The large 690 sq. km tenement package Larvotto holds east of Norseman in WA (Eyre Project) has been under-explored for lithium and recent work by Liontown Resources in the area has gained significant attention from the investment community. The recent soil geochemistry results and surface mapping has highlighted several anomalous lithium zones associated with pegmatite float and small pegmatite outcrops. The investment from LRC and the E&D Fund will allow for a rapid expansion of the lithium exploration at the Merivale prospect and Eyre project in general.
For further information please visit: https://www.larvottoresources.com/
