Canada based Chimata Gold Corporation says it has signed a binding letter of intent with the Zimbabwe Lithium Company, which was recently granted exclusive development rights for the Kamativi lithium tailings deposits.
The Government, through the Zimbabwe Mining Development Corporation (ZMDC), has struck a deal with a foreign investor to exploit lithium deposits worth $1,4 billion in Matabeleland North.
Mines and Mining Development Minister, Winston Chitando has already revealed that feasibility studies were underway on two other lithium projects, one of which is similarly a target of an unnamed listed company with a fourth project, also being explored.
“Chimata Gold Corp is pleased to announce that it has entered into a binding letter of intent with Zimbabwe Lithium Company (Mauritius) Limited, a privately held company incorporated under the laws of Mauritius,” said the firm in a notice last week.
Pursuant to the terms of the LOI, Chimata said it will subscribe to the share capital of Zimbabwe for an initial subscription of 19 percent of Zimbabwe’s share capital in exchange for the allocation by Chimata of a number of shares representing 19 percent of its then issued and outstanding share capital to the Zimbabwe Lithium Company. The firm plans further acquisition of remaining issued and outstanding share capital of Zimbabwe Lithium upon the fulfilling of certain terms and conditions as set out in the letter of intent.
According to Chimata, the Zimbabwe Lithium Company (ZIM), “will be focused on developing lithium mining properties and assets located in Zimbabwe held by the firm and related companies. Chimata alluded to the recent signing of a joint-venture agreement with the ZDMC with respect to the grant of exclusive development rights for the Kamativi lithium tailings deposit at the disused tin mine. This tailings stockpile has been surveyed to give an estimated 23,168,000 metric tonnes of historical tailings material on surface,” it said.
In order to finance the contemplated transaction, Chimata has pledged to complete a non-brokered private placement of up to 2 million Canadian dollars (CAD$2 000 000) by the issuance of units of its units at a price of $0,15 per unit.
It said the entering into the Definitive Agreement was also subject to the production by ZIM of a technical report prepared in accordance with the provisions of NI 43-101 — Standards of Disclosure for Mineral Projects.
Commenting, Chimata chairman, Mr Richard Groome, said: “We are encouraged and excited by the recent changes in Zimbabwe. We believe that these changes signal an important investment opportunity. Zimbabwe is very rich in mineral assets and remains, in my opinion, one of the most attractive destinations in Africa.
“We look forward to working with the Zimbabwe Government, ZMDC and our operating partners at ZIM in building a rapidly emerging capital efficient lithium supplier to the world”.
Mr John McTaggart, managing director of Zimbabwe Lithium, also said: “We are very pleased to have on board a partner in Chimata. In particular, during this very important and dynamic transition period in Zimbabwe, we would like to thank the Government of Zimbabwe, our partners at ZMDC and all stakeholders that have worked with us to bring this project to its current stage”.
Mines and Mining Development Minister Winston Chitando is on record saying the lithium investment was envisaged to employ 500 people directly with immense downstream impact. Zimbabwe is considered to be the fifth-largest lithium producer in the world after Australia, Argentina, Chile and China.
The boom in global electrical vehicle manufacturing, which uses lithium-powered batteries, has been driving demand for the mineral.