Chariot Corporation (ASX: CC9) has signed a binding and conditional agreement with local partner Continental Lithium and joint venture entity C&C Minerals to establish small-scale mining across its lithium portfolio in Nigeria.
The agreement is subject to the completion of Chariot’s acquisition of its interest in C&C Minerals and four Nigerian projects — Fonlo, Gbugbu, Iganna, and Saki — under a share sale agreement announced in July.
The agreement formalises the parties’ commitments to rapidly establish small-scale mining operations in Nigeria conisistent with local mining regulations and community expectations.
Respective Equity Interests
Continental Lithium will retain a 33.33% interest in the Nigerian projects through its holding in C&C Minerals and plans to leverage its local expertise to oversee operations and logistics of the small-scale mining operation.
Chariot – which holds a 66.67% interest in C&C Minerals – will be responsible for arranging funding and offtake negotiations, as well as ensuring regulatory compliance.
Chariot may also elect to provide a working capital loan of up to US$500,000 on commercial terms to support small-scale mining start-up and operating costs.
Dual Approach
Small-scale mining will operate simultaneously with large-scale exploration and development of the Nigerian projects, which cover 254 square kilometres of highly-prospective ground.
Chariot’s exploration team will work with Continental’s geologists to pursue modern exploration programs outside of the artisanal mining zones to define substantial lithium resources across the project clusters.
This will include high-resolution geophysics, geochemical soil sampling, and targeted drilling.
By pursuing a dual strategy of near-term small-scale production alongside long-term resource exploration, Chariot intends to generate early cash flows and unlock the full value of the Nigerian lithium portfolio.
Three-Phased Strategy
Chariot has planned a three-phased strategy to scale-up existing artisanal lithium mining activities, progressively expand the scope of operations and de-risk the projects.
Phase 1 will comprise mapping, sampling, and limited drilling of artisanal workings to delineate near-surface lithium-bearing pegmatite zones and define a localised resource to provide a geological basis for small-scale mine planning.
Collected lithium samples will be sent for Phase 2 metallurgical analysis to determine optimal processing methods and expected recoveries of spodumene concentrate, as well as guide the design of a processing flowsheet and potential economics of small-scale mining.
In Phase 3, Chariot and Continental will evaluate and select the best option to process mined material at a commercial scale, including the assessment of toll processing opportunities presented by third party-operated spodumene concentrate plants in Nigeria.
Chariot will conduct a cost comparison of integrated logistical and tolling expenses associated with each third-party facility against a joint venture-owned modular on-site processing unit, with the aim of maximising profitability and minimising the time to deliver product to the market.
Offtake Discussions Underway
The Nigerian lithium assets have previously produced lithium at an artisanal scale, with historical sales indicating commercial potential of the lithium mineralisation.
In anticipation of renewed production through small-scale mining, Chariot has entered into discussions with international commodity buyers regarding future offtake of lithium ore or concentrate.
The company said successful discussions could result in a binding agreement to serve as a basis to secure financing for the small-scale mining development.
