Ascent Resources Plc (LON:AST) (LON: AST) said it and joint-operating partner American Helium LLC have entered a binding exclusive access and use licence with Utah Brine Corporation (UBC), a special-purpose vehicle established by Neometals Ltd (ASX: NMT) and Omaha Value Inc, covering brine sampling, test work and potential lithium and potash extraction from 26 inactive wells and related leases and infrastructure in the Paradox Basin, Utah.
Key financial and commercial terms, according to the filing, include an annual access fee of US$200,000, a permitting fee of up to US$1.9 million (to be funded by Omaha Value Inc on UBC’s behalf), and a gross smelter return royalty of 2.5%–3.5% on sales of lithium and potassium products; the licence will automatically terminate if commercial extraction has not begun by the seventh anniversary.
The agreement includes security and transfer arrangements to protect UBC’s rights, restrictions preventing Ascent and its affiliates from granting overlapping rights during the term, and Neometals will issue Ascent 4,900,000 unlisted options exercisable at A$0.10 per share, the company said, describing the deal as a non-dilutive monetisation of Ascent’s acreage that requires no upfront drilling or development spend by Ascent.
No mineral resources or ore reserves have been estimated for the brine project at this stage and any development is conditional on exploration, test work, permitting, funding and investment decisions, the filing adds.
Dave Patterson, Chief Executive Officer of Ascent Resources plc, commented: "We are delighted to have concluded this strategic licence agreement with UBC, backed by Neometals and Omaha Value. This transaction addresses key US supply vulnerabilities for two designated critical minerals: the US remains >50% net import reliant for lithium and 92% net import reliant for potash."
