GCIAterian joins forces with Rio Tinto and Kinunga Mining for lithium exploration in Rwanda
() , an Africa-focused metal exploration and development company, has signed a definitive Earn-In Investment and Joint Venture Agreement with Rio Tinto Mining and Exploration Ltd and Kinunga Mining Ltd.
The agreement aims to explore and develop lithium and by-products at the HCK Joint Venture project in Rwanda, holding the HCK license.
The agreement gives Rio the option to invest US$7.5m in two stages, earning up to a 75% interest in the license for mineral exploration crucial for a successful transition to renewable energy. The first stage requires US$3m over two years to earn a 51% interest, while the second stage demands US$4.5 million over three years to gain an additional 24%, reaching a total interest of 75%.
Additionally, Rio will provide a cash consideration of US$300k during the two stages. A 2% capped Net Smelter Return over the Project, limited to US$50m, has also been granted. Rio has the option to include Aterian's other Rwandan projects, pending license approval.
The Project spans 2,750 hectares in southern Rwanda, featuring 19 identified pegmatite zones, and is conveniently located near well-established infrastructure, including national highways, power, and water. The agreement marks a significant step towards exploring valuable minerals in the country for a sustainable energy future.
Charles Bray, Chairman of Aterian, commented, "This is a transformative deal for Aterian and highlights our ability to identify potential world-class deposits in critical minerals such as lithium. We have identified 19 separate LCT (lithium-caesium-tantalum) pegmatite zones across the 2,750-hectare project offering the prospective scale necessary to attract such a major partner as Rio Tinto.”
View from Vox
A hugely positive update from Aterian, with the collaboration endorsing the company's capital efficient business model as well as demonstrating the potential of Rwanda as a mining jurisdiction. The collaboration allows the three companies to combine resources to potentially discover critical metals, such as lithium, that are the linchpin for global electrification ambitions.
Lithium is the central chemical element of dominant battery chemistries. Benchmark Minerals Intelligence forecasts that in 2023 lithium demand will reach 900,000 tonnes, a jump of 27% year-over-year, and further forecast to reach 1.5 million tonnes in 2026.
In Rwanda, Aterian holds the rights to over 3,000 hectares of ground for critical and strategic metals, with projects including the Musasa Project in Western Rwanda, a 70% shareholding in the HCK Joint Venture and a 50% shareholding in the Dynasty JV, both in southern Rwanda.
Its southern projects have beared fruit so far, with Aterian identifying 19 pegmatite zones. The partnership with Rio Tinto should open the door to discovering more important metals in Aterian’s southern-based HCK Joint Venture.
Following the news, Aterian said it will look to replicate the capital efficient exploration and development business model in its other project concessions in Rwanda and Morocco.
shares moved 24% higher on the announcement.
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