Bermuda-based Trek Metals has agreed to acquire Edge Minerals, which owns the South Woodie Woodie manganese project in the Pilbara region, Western Australia.
With the acquisition of the manganese project, the company obtains a unique near-term development opportunity in the battery materials sector.
Under the agreement, Trek will acquire all the shares of Edge Minerals by way of a scheme of the arrangement, which is expected to be implemented in October this year.
The transaction values Edge at around $4m and each Edge share at approximately $0.1755
Upon implementation of the scheme, Trek shareholders are expected to own 86.53% of the combined entity, and Edge shareholders the remaining 13.47%.
South Woodie Woodie Project will be renamed as Hendeka project.
The transaction enabled it to pursue the development of an advanced and well-located manganese project in a Tier-1 mining district, said the company.
Trek chief executive officer Derek Marshall said: “South Woodie Woodie represents an advanced, high-quality asset that offers an exciting opportunity for Trek to target the rapidly expanding battery materials sector.
“Importantly, South Woodie Woodie already has an existing Mineral Resource, positive preliminary metallurgy and all required access agreements in place.
“This will enable Trek to move ahead quickly with our initial work programs focused on expanding the existing Resource and assessing the potential to produce battery-grade manganese products.”
The transaction provides Trek with exposure to manganese, the metal with strong supply-demand fundamentals and a robust outlook given its use in steel manufacturing.
It currently accounts for 85-90% of global consumption, and growing consumption by the lithium-ion battery sector, said the company.
The South Woodie Woodie manganese project contains seven granted exploration licences, one pending exploration licence and one retention licence.
It has a JORC Inferred Mineral Resource Estimate (MRE) of 11.3Mt grading 15.0% Mn for the Contact and Contact North deposits, with immediate drill targets.
Spitfire Resources has previously conducted metallurgical beneficiation test work on PQ diamond core, in collaboration with Mineral Engineering Technical Services (METS).
Upon closing of the acquisition, Trek intends to undertake resource extension and exploration drilling to expand and upgrade the existing resource.
The company is planning to commence drilling in the December quarter of 2022, subject to the availability of the drill rig.
Marshall added: “High-purity manganese is expected to see strong demand growth over the coming years as an increasingly desirable component of battery cathode composition.
“The raw material is significantly less expensive than alternative cathode materials – such as cobalt and nickel – while also offering batteries with reduced charging time and enhanced safety performance.
“Excitingly, Trek is ideally positioned to pivot towards the battery sector, with a Board that has a very strong track record in the space.”
