MPJ diversifies into lithium in the Pilbara

Mining Projects Group (ASX:MPJ) has committed to acquiring the ‘Lynas Find Assets’ project from Tyranna Resources (ASX:TYX) in exchange for MPJ fully paid ordinary shares, cash and associated performance options.

The Lynas project adjoins Pilbara Minerals’ (ASX:PLS) Pilgangoora lithium-tantalum project totaling 52.2Mt @ 1.3% Li2O and 32.9Mt @ 0.0022% Ta2O5. Also adjacent, is Altura Minings’ (ASX:AJM) lithium project totaling 26.06Mt @ 1.2% Li2O.

In acquiring the Lynas project, to be known as the Pilbara Lithium Gold Project, MPJ hopes to emulate resource definitions achieved by its local neighbors thereby diversifying its asset portfolio and gaining exposure to lithium – a commodity-downturn resistant metal currently undergoing growing demand on the back of surging sales of lithium-ion batteries that use lithium.

MPJ already has a 100% stake in the Row Hills nickel project near Kambalda in Western Australia.

MPJ’s newly acquired project in the Pilbara region adjoins other lithium projects, including Pilbara Minerals’ 2nd largest spodumene deposit in the world

On the announcement of the deal, MPJ Managing Director Joshua Wellisch said, “The extensive exploration undertaken at Pilbara had clearly demonstrated its potential to host significant lithium and gold mineralisation”. He also added that “this view was also underpinned by the extensive lithium resources established on the adjacent tenements by Pilbara Minerals ASX:PLS and Altura Mining ASX:AJM.”

Pilbara Lithium Gold Project

The Pilbara Lithium Gold Project covers 29 sq. km., approximately 100km south of Port Hedland, producing around 125,500oz between 1994 and 1998. The site has seen extensive past exploration with ASX-listed Trafford Resources defining a 49,515oz gold resource comprising 933,400t at 1.65gpt, back in 2008.

The deal sees MPJ paying an initial amount of $220,000 in cash, followed by 300 million MPJ shares subject to tenements being granted.

The deal also contains performance milestones which MPJ is optimistic about achieving.

If MPJ proves up a mineral resource of at least 5 million tonnes at 1.2% Li2O or 500,000 ounces of gold, MPJ it will give TYX a further 80 million shares. A 15 million tonne lithium resource or 1,000,000 ounces of gold will trigger another 80 million shares to be paid to TYX.

As part of the acquisition deal, TYX’s Chairman Ian Finch will join MPJ’s Board as Chairman with initial focus likely to be a $1.2 million capital raising that is expected to fund future exploration.

Tyranna and MPJ Chairman, Mr. Ian Finch

Coming from an exploration and mining geologist background stretching 45 years, Mr. Finch will spearhead development of MPJ’s new acquisition. During his career Mr. Finch listed Taipan Resources on the ASX in 1993 and was a founding Chairman of ASX-listed companies Robust Resources and Bannerman Resources. His latest ASX venture is Tyranna Resouces (ASX:TYX) – a company formed by the merger of Trafford Resources and IronClad Mining – where he is expected to retain his Chairman position. Mr. Finch’s early work ensured Trafford Resources was a key seed capital investor in the now renowned Orinoco Gold Ltd, a junior gold explorer expected to go into production later this year.

In response to MPJ’s announcement earlier today and referencing his business acumen in acquiring a stake in Orinoco Gold, Mr. Finch said, “I am delighted with this deal, which forms part of our long established investment strategy that has, over the years, provided shareholders with diversity of opportunity and both direct and indirect benefits”.

With the deal scheduled to be completed within the coming 30 days, MPJ has already earmarked the new acquisition as a top priority for an “aggressive on-ground exploration program” likely to commence sometime in Q1 2016, subject to funding being secured.