Arena Minerals Inc. ("Arena" or the "Company") is pleased to announce that its subsidiary Sal de la Puna Holdings Inc. (“SdlPH”) has entered a binding Letter of Intent (the “LOI”) to acquire five mining claims covering 2,200 hectares of the Pastos Grandes basin, located in Salta province, Argentina. Three of these claims, covering a total of 2,000 hectares, lie immediately adjacent to the Fortuna II claim block where the Company recently discovered a 275-metre brine aquifer averaging 441 milligrams per litre lithium (for more information refer to press release dated October 3, 2022).
This eastern sub-basin of Pastos Grandes is interpreted as extending south on to the newly acquired claims, potentially hosting the continuation of the discovered brine bearing aquifer. The new claims will form part of the Company’s Sal de la Puna lithium brine project ("the "Project"), which upon closing will cover 13,200 hectares of the Pastos Grandes basin in Argentina.
William Randall, President & CEO of Arena, stated, “This acquisition strengthens Arena’s position in one of the leading lithium basins in the world. It is extremely valuable to us as it not only increases our resource potential in a newly discovered area, but also adds land holdings in the immediate vicinity of our core Almafuerte and Graciela claim blocks. Upon closing of the transaction, we will continue to explore this area with the intention of positioning the Company beyond its currently contemplated potential production capacity.”
A map showing the Sal de la Puna land holdings, including the acquired claims, can be found below.
Terms of the LOI
Pursuant to the terms of the LOI, SdlPH’s 100% owned Argentine subsidiary, Puna Argentina S.A.U. (“PASA”), will enter into a definitive Sale and Purchase Agreement (the “Agreement”) to acquire 100% title over three claim blocks (Fortuna I, Cerrana, Betina) and lithium brine rights over an additional two claim blocks (Sol de Mañana, Doña Pancha) covering a total of 2,200 hectares. The vendor is a local, arms length privately owned company and will not be receiving any shares of the Company as part of the transaction.
Total consideration of USD $3,825,000 shall be paid to the vendor, as follows:
- a first installment of USD $350,000 on signing of the Agreement;
- a second installment of USD $825,000 on signing of the public deed required by law to instrument the transfer of mines (the “Deed”), which will take place 60 days after the signing of the Agreement or when the designated notary public obtains title certificates free of debt, whichever occurs first;
- a third installment of USD $1,350,000 12 months after signing the Agreement; and
- the fourth and last installment of USD $1,350,000 24 months after signing the Agreement.
As collateral for the payments of the second and third installments, PASA will grant a mortgage guarantee in favour of the vendor on the Fortuna I, Cerrana and Betina claims.
The Agreement will supersede the LOI and is expected to be signed within the next fifteen (15) days. Execution of the Deed required by the Argentine Federal Mining Code to complete the transfer of three claims and closing of the transactions contemplated by the Agreement is expected to take place on or before December 31, 2022.
Together with the execution of the Deed, PASA will enter a Bilateral Usufruct Agreement with the vendor in which usufruct rights to explore and exploit the lithium bearing brines (and any other minerals or metals contained within the brines) over the Sol de Mañana and Doña Pancha claims shall be conceded in favour of PASA. In the same agreement PASA shall concede the vendor similar rights over any solid state borates (ulexite, etc) contained within the acquired Fortuna I, Cerrana and Betina claims.
The Bilateral Usufruct Agreement will be subject to the maximum term recognized by the Argentine Federal Mining Code of 40 years, and to the usual conditions of mutual and reciprocal indemnity against any damage or claim that either Party may suffer for the operations undertaken by the other Party on site, including obligations to undertake such operations in compliance to any applicable legislation, labour and environmental laws.
Sal de la Puna Holdings Inc.
Sal de la Puna Holdings Inc is registered in Canada and is jointly owned by Arena (65%) and Ganfeng New Energy Technology Development (Suzhou) Co., Ltd. (“Ganfeng Lithium”; 1772.HK; OTCQX: GNENF) (35%). SdlPH owns 100% of PASA, incorporated in Argentina, which in turn owns 100% of the Project.
Warrant Exercise Update
The previously announced exercise of 36,838,546 warrants for total proceeds of $7,367,708 is expected to close by the end of October 2022, following receipt of warrantholder regulatory approval.