Karora Resources (TSX: KRR) and Kalamazoo Resources Limited (ASX: KZR) combined their respective lithium exploration projects in a joint venture focused specifically on lithium extraction and production.
The two companies signed an agreement on Monday to create a joint lithium and critical metals company called Kali Metals Limited.
This arrangement will enable Karora shareholders to benefit from the significant growth potential of a larger, lithium-focused investment vehicle, which will finance its own exploration and development initiatives.
Karora will contribute its promising Higginsville Lithium Project located south of Kalgoorlie, Western Australia, while Kalamazoo will transfer its Australian lithium projects, including Marble Bar and DOM’s Hill in the Pilbara, and Jingellic and Tallangatta in the Lachlan Fold Belt in New South Wales and Victoria.
Kali aims to become a leading critical minerals exploration company in Australia, with a combined tenure of approximately 3,833 square kilometres that includes adjacent world-class lithium mines and deposits in Western Australia’s Eastern Yilgarn and Pilbara regions and prospective lithium exploration projects in the Lachlan Fold Belt.
Kali intends on raising between $10M and $12M at IPO
To fund its exploration and drilling plans across the Australian lithium portfolio, Kali intends to raise between A$10 million and A$12 million at IPO. Kalamazoo will own 55 per cent of Kali, while Karora will own the remaining 45 per cent (prior to the proposed capital raise).
Kali will be managed by an experienced team consisting of managing director Graeme Sloan and non-executive chairman Luke Reinehr. Both bring extensive knowledge of the newly combined Kali lithium tenements and a proven track record of value creation in Australia’s mining sector.
“The creation of a separate lithium-focused vehicle allows Karora’s management team to remain laser-focused on our existing gold and nickel production growth strategy, while giving Karora shareholders near-term exposure to the lithium exploration potential on our Higginsville tenements in combination with Kalamazoo’s tremendous lithium projects in Western Australia, New South Wales and Victoria,” said Paul Andre Huet, chairman and CEO of Karora.
Kali’s lithium exploration tenure at its IPO will encompass Kalamazoo’s Marble Bar and DOM’s Hill Lithium Projects in the Pilbara region of Western Australia, covering 199 square kilometres. These projects are being explored in a joint venture with Chilean lithium producer Sociedad Química y Minera de Chile S.A. (NYSE: SQM) and are adjacent to the world-class Pilgangoora and Wodgina lithium mines.
Additionally, Kali will hold lithium mineral rights to a significant portion of Karora’s Higginsville gold tenement package, spanning approximately 1,607 square kilometres in the Eastern Yilgarn region of Western Australia.
This region is home to the nearby Mt Marion and Bald Hill lithium mines, as well as the Pioneer, Manna, and Buldania lithium deposits. Kalamazoo’s Jingellic and Tallangatta Lithium Projects, located in the Lachlan Fold Belt spanning 2,027 square kilometres across New South Wales and Victoria, are also part of Kali’s lithium exploration tenure at IPO.
Karora Resource shares rose 1.6 per cent to $5.57 on the Toronto Stock Exchange.
Kalamazoo Resources shares rose 15.3 per cent to $0.15 on the Australian Securities Exchange.