5E Advanced Materials, a boron and lithium company, announces it it has entered into an assignment agreement with Osmond Resources Limited.
The new agreement with Osmond provides optionality for 5E to retain an interest in the greenfield Salt Wells Project while deferring additional spending requirements to Osmond in the near term. This agreement aligns with the Company’s strategy and overall goal of bringing its 5E Boron Americas Complex in southern California online and becoming the first new producer of borate and lithium in the U.S.
In 2018, the Company entered into an Earn-in Agreement with Great Basin Resources, Inc. whereby the mineral interest for the Salt Wells Project could be earned over time through a minimum required exploration expenditure of USD $3,000,000. To date, the Company has spent approximately USD $544,000 on exploration activities.
Upon assigning the Earn-in Agreement to Osmond, 5E will defer all the additional exploration spending requirements to Osmond in exchange for retaining 20% of the mineral interest upon completion of exploration activities. Once the mineral title is transferred to 5E and Osmond, 5E may elect to form an unincorporated joint venture with Osmond to carry out joint activities at the Salt Wells Project, whereby future funding would be contributed on a pro-rate basis. Additionally, 5E obtained a right of first refusal to act as the exclusive sales and marketing agent for the sale of all borates produced from the Salt Wells Project.
Susan Brennan, Chief Executive Officer of 5E Advanced Materials, commented, “We are pleased to have reached this assignment agreement with Osmond relating to the exploration of the Salt Wells Project, as it serves several strategic advancements for our Company. This not only allows 5E to forego the expenditures required for initial exploration and subsequent production of a non-core asset, but most importantly it allows the Company to focus its efforts on our attractive and advanced 5E Boron Americas Complex at Ft. Cady. As part of the assignment agreement, 5E has retained the optionality to capture associated economic upside tied to any successful exploration of borates at the Salt Wells Project.”
Brennan concluded, “As we look ahead to the remainder of 2023, we will continue to focus intently on advancing our 5E Boron Americas Complex, to begin production of the mineral resources including boric acid and lithium. We remain advantageously positioned, possessing a premier resource to develop, scale, and integrate boron advanced materials here in the U.S.”
5E Advanced Materials, Inc. is focused on becoming a vertically integrated global leader and supplier of boron specialty and advanced materials, complemented by lithium co-product production.