Lithium Royalty Corp. (“LRC”) has entered into an agreement to acquire a newly created 1.5% gross overriding revenue (GOR) royalty on the land claims held by M4E Lithium Ltda. (“M4E”), a private lithium explorer focused on Brazilian hard rock lithium deposits. The land claims are positioned across Brazil in known lithium and pegmatite districts such as Minas Gerais, Borborema, Ceara and Tocantins.
“As a function of its large-scale, high grade, and coarse-grained ore bodies, coupled with significant speed to market advantages, Brazil has quickly become the leading spodumene producer in the Americas. LRC has been an early and consistent supporter of the most prospective lithium projects in the country, having partnered with Sigma Lithium in 2018 and Atlas Lithium in 2023. We are excited to continue our investments in the country, as M4E boasts one of the largest exploration packages in Brazil with over 91,000 hectares in key lithium-rich locations, with confirmed occurrences of spodumene in multiple areas,” said Ernie Ortiz, President and CEO of Lithium Royalty Corp.
"This partnership with LRC is a game-changer for M4E," said Sergio Castanho, CEO of M4E. "We have the assets, the team, and now the capital to aggressively explore and develop our lithium resource. LRC's investment and expertise will be instrumental in accelerating our progress and creating significant value for all stakeholders."
Investment Highlights
M4E is an Emerging Lithium Explorer: M4E holds one of the largest lithium exploration packages in Brazil, covering over 91,000 hectares across the Lithium Valley in Minas Gerais, Borborema, Ceara and Tocantins region. Early exploration has confirmed the presence of spodumene, a key lithium-bearing mineral, in multiple areas. M4E has attractive land positions in Minas Gerais in the vicinity of Sigma Lithium (currently in production) and Atlas Lithium (expected production 4Q24). At Borborema, the region hosts several historical tantalum and feldspar mines, with artisanal mining of spodumene in certain cases. M4E has already done exploratory drilling in a few prospects and confirmed several lithium-bearing pegmatites. It has confirmed spodumene to date in five of its targets. Rock chip samples at some of the properties have returned spodumene with lithium oxide (Li2O) values as high as 6.72%.
LRC Funding to Expedite Exploration: M4E aims to continue drilling activities by the end of 2Q24, with a plan to drill approximately 15,000 meters this year on its three key targets that have shown confirmed spodumene.
M4E will also continue mapping additional early-stage targets with more than 100 pegmatites initially mapped in its area, to build a robust pipeline of potential lithium deposits. Depending on drill results, M4E expects to advance quickly towards development and announce a Preliminary Mineral Resource by mid-2025.
M4E to Benefit from Local Brazilian Expertise: M4E currently has 25 employees, with the majority comprising of geologists and technical experts with both lithium and Brazilian exploration experience. CEO Sergio Castanho, has over 20 years of mining experience, having previously held leadership roles at Anglo American and Aura Minerals. Field geologists on the M4E team have experience at AngloGold, Yamana Gold, Vale, and Jaguar. LRC believes M4E is well positioned to capitalize on the fast-growing Brazilian lithium sector.
Brazil to Continue to Expand its Leading Position in Lithium: Brazil is currently the largest hard rock lithium producer in the Americas, with three producers of spodumene concentrate. Atlas Lithium is also guiding to commencing production in 4Q24, further expanding Brazilian spodumene output. Brazil’s speed to market is unparalleled in the Western world, with a permitting regime that is robust yet timely. All three of the major exploration projects in Minas Gerais have received priority review to expedite permitting, validating Brazil’s pro-lithium support. Brazilian lithium deposits, thus far, are in pro-mining jurisdictions and the geological makeup of high-grade, coarse-grained ore bodies allows for processing that is less reagent-intensive and chemical-intensive, allowing for a less environmentally intrusive operation. This should allow M4E to progress from explorer to developer in short order.
Transaction Details
LRC to acquire a 1.5% GOR royalty on the land claims held by M4E for consideration of $1.5 million at closing and $2 million upon achieving 10 million tonnes (Mt) of measured and indicated resource on or before December 31, 2025. The consideration for the royalty acquisition has been funded by LRC entirely from cash on hand.
Source: https://lithiumroyaltycorp.com/