Wealth Minerals Ltd. [WML-TSXV; WMLLF-OTCQX; WMLCL-SSE; EJZN-FSE] said Tuesday October 15 that it has signed a preliminary deal that will allow Uranium One Group (U1G) to acquire up to a 51% stake in the company’s Atacama lithium project in northern Chile.
A subsidiary of Russia’s state nuclear company Rosatom, U1G is a global energy company and one of the world’s largest uranium producers. Its portfolio includes assets in Kazakhstan, the United States and Tanzania.
Wealth Mineral shares advanced on the news, rising 2.8% or $0.01 to 37 cents. The shares are currently trading in a 52-week range of 26.5 cents and 67 cents.
The Atacama lithium project is a 46,200-hectare licensed position located in the Atacama Salar in Region 11 of Antofagasta. Wealth said it has signed a memorandum of understanding that provides for a due diligence period, during which U1G can conduct technical, geological, legal, tax, financing and other due diligence on the Atacama Project.
The MOU also gives U1G the right to match the terms of any proposed alternative transaction. It also envisages a scenario where the two parties will enter into an offtake agreement upon mutually agreed upon terms, allowing U1G to purchase 100% of the products produced from the Atacama Project.
In addition, the MOU provides for increased co-operation between the parties for the development of the lithium projects. Such development is expected to include, among other things, the application of U1G’s ecologically friendly sorption lithium extraction technology.
“The lithium industry’s future growth is about the profound changes happening in the way the world uses energy,” said Wealth President Tim McCutcheon. “Wealth’s team has invested significant time in studying and evaluating the best methodologies for developing lithium assets, with a view to avoid using solar evaporation,” he said.
“Partnering with U1G will help Wealth accelerate the development of lithium projects by using modern technology and moving away from outdated solar evaporation to a more efficient and environmentally friendly sorption technology.”
Lithium is a soft white metal that is used in the production of heat-resistant glass and ceramics, lithium grease lubricants, iron, steel and aluminum well as lithium-ion batteries, which are used in small electronic devices, including smart phones and laptops as well as electric vehicles.
Brines (in salt ponds) and spodumene (hard rock) represent the two main sources of commercial lithium production. The largest known deposits are found in South America.
Lithium production operations that utilize salars (underground brine reservoirs) typically use solar evaporation as the major part of the lithium recovery process, which requires significant amounts of land for ponds in which lithium brine, after subsurface pumping, is placed for drying.
U1G offers a lithium extraction technology for processing lithium-bearing brine material which uses a reusable catalyst material to attract lithium out of brine, thus eliminating the need for solar evaporation.