Novo Litio acquires Medgold’s litium project in Portugal

David McHutchon | September 4, 2017 | Views: 524

Novo Litio LTD (ASX: NLI, FRANKFURT: ORM) reports that it has acquired a very large (354km2 ) granted tenement package, over an area of known LCT-type pegmatite occurrences around the Sepeda Lithium Project, from TSX-v listed Medgold Resources Corp. (“Medgold”). This transaction is a major strategic achievement for NLI within the northern pegmatite belt in Portugal. This tenement package is one of the few holdings along the belt that is not subject to overlapping exploration tenement applications, of which many have been in application status for over 12 months.

The acquisition provides the Company with a rich exploration pipeline for petalite/spodumene lithium deposit targets in the immediate vicinity of its core Sepeda project. Portuguese Mining and Energy Ministry (DGEG) records and initial fieldwork by NLI indicate multiple occurrences of Sn/W-bearing pegmatites within the new tenement package. These are analogous to the Sepeda Lithium Project, which is recorded, by DGEG, as a single Sn/W-bearing pegmatite occurrence within the same rock sequence. NLI believes that such historically recorded Sn/W pegmatite occurrences, as proven by the Sepeda discovery, are strong targets for lithium.

As previously disclosed, Novo Litio has a binding agreement to acquire 100% of the granted licence and licence applications held by Lusorecursos ARG and Lusorecursos LDA. Completion of the transfer of licences to Novo Litio remains pending and has been frustrated by the vendors. Novo Litio has sought unsuccessfully to resolve the issue on a commercial basis. The Company considers it has binding and enforceable legal rights and is now pursuing the matter on an expedited basis in the Courts of Portugal (refer to the Company’s ASX announcement released on 28 July 2017 entitled “Commencement of Legal Proceedings re Sepeda” for further details).

Transaction Details:

Lusidakota, a wholly-owned subsidiary of NLI, will purchase 100% of Medgold’s wholly owned Portuguese subsidiary. In consideration for the acquisition of 100% of Medgold’s subsidiary, Lusidakota will pay Medgold: 167,500 EUR (One hundred and sixty-seven thousand, five hundred Euros), equivalent to the bonds paid to the DGEG for the Boticas and Chaves exploration licences, upon completion of the Proposed Transaction. In the event that a discovery is not made and these tenements are relinquished, NLI understands that these bonds will be recoverable from the DGEG.

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