"We are extremely pleased to have this joint venture with Monumental on our Laguna Blanca prospect. With our energies currently focused on expanding our lithium resource on Salar de Arizaro property in Argentina, this joint venture will ensure work continues on one of our Chilean properties," Lithium Chile's president and CEO, Steve Cochrane, said.
Monumental's CEO, Jamil Sader, said the project had the potential to become a "significant caesium-lithium deposit" in the region and members of the company's team are currently in Chile on a site visit.
"The project is complimentary to the company's flagship Jemi heavy rare earth element project in Coahuila, Mexico, and the strength of these two assets will position Monumental to take advantage of the global shift of decarbonisation," Sader said.
For Monumental to be able to take the 75% stake in the project, the company must issue common shares, make staged payments to Lithium Chile, and incur exploration expenditures.
The cash payments of an aggregate of C$1.5 million (US$1.2 million) are to be staggered over three years from the acceptance date.
The company must also incur minimum staged expenditures on the project of not less than C$1.5 million over a period of three years.
And, within 30 days of the acceptance date, Monumental is to issue 3.4 million common shares to Lithium Chile.
Lithium Chile would also retain a 1% net smelter returns royalty payable upon commercial production.
Monumental is planning on undertaking a non-brokered private placement for proceeds of up to C$5 million, at a share price of $0.45 per unit as well as one-half of a transferable share purchase warrant, which will entitle the holder to acquire a share at a price of $0.65/share for two years following closing.
The proceeds raised are to be used as payments related to the options agreement, maintenance and exploration funding expenses across its properties, including Laguna, and for general corporate purposes and working capital.
Lithium Chile's share price was C$1.03 on April 4, having risen 11% day-on-day. Meanwhile, Monumental's share price rocketed 25% to C$0.64.
Lithium Chile had a market capitalisation of C$143 million and Monumental's stood at C$15.05 million.
