Perth-based gold explorer Ardiden is optioning its northwestern Ontario lithium assets to a new junior mining entity, also from Australia.
Ardiden has signed an option agreement with Great Northern Lithium, to acquire 80 per cent of Ardiden's lithium portfolio.
The total consideration could be up to A$8.7 million if a sale goes through.
Great Northern Lithium is described in an Ardiden news release as being led by an experienced team, well-schooled in lithium exploration and in bringing deposits into production around the world.
Ardiden said this spring it was considering its options on what to do with its lithium properties, based on the surging world demand for lithium, used in the electric vehicle battery market. The company wants to focus on explorings its emerging gold projects in the Pickle Lake area.
Under consideration were a number of business combinations and partnerships including a spinoff company, joint ventures or the sale of a project.
Ardiden holds three lithium projects in the region - Seymour Lake, Root Lake and Wisa Lake - collectively covering 95 square kilometres.
Seymour, located at the north end of Lake Nipigon, contains a resource of 4.8 million tonnes of ore, grading 1.25 per cent lithium oxide.
“Monetizing 80 per cent of our lithium portfolio provides exploration capital to Ardiden, which will be deployed at its highly prospective package of gold prospects at the Pickle Lake Gold Project," said Ardiden CEO Robin Longley.
Ardiden's Pickle Lake Gold Project consists of 22 identified gold deposits and prospects, covering 870-square-kilometres.
In the deal, Ardiden will receive a $200,000 upfront fee while Great Northern performs a 60-day due diligence process that, if positive, would result in a $1.5 million transfer payment to Ardiden followed by the remaining $7 million in cash installments.
"(Great Northern Lithium) will benefit from our in-country experience and existing relationships with First Nation communities as well as bringing their own expertise in management, marketing, evaluation and development of these strategically-located spodumene-hosted lithium deposits in a booming North American region for critical metal project development," added Longley.
There's no guarantee the sale will go through, said Ardiden in the release, but if the option is exercised, any sale of these properties must get approval from Ardiden shareholders.