TNR Gold Corp (TSX-V:TNR, FRA:TNW, OTC:TRRXF), the green energy metals royalty and gold company, welcomed news that Ganfeng Lithium has consolidated 100% ownership of the Mariana Lithium project in Argentina, and that the project is advancing to construction stage.
In 2009, TNR founded International Lithium (TSX-V:ILC) Corp (ILC), which owned the Mariana Lithium project in Salta Province, Argentina, and TNR retains a 1.8% net smelter returns (NSR) royalty on the asset.
Ganfeng Lithium has now purchased ILC's remaining 8.58% stake in the subsidiary, which owns the project. ILC has also sold its other rights in the project, including the right to acquire a further 10%.
"I am also very pleased to see that Ganfeng Lithium has consolidated 100% of the Mariana Lithium Project and advanced it to the construction stage," TNR Gold Executive Chairman Kirill Klip said in a statement.
He noted that this news comes after a 55% increase in measured and indicated resources at the project following the previously announced 2020 increase of more than 250% in measured and indicated resources from the 2017 resource estimate.
"We extend our congratulations to Ganfeng and salute the people of Argentina on the celebration of 'Pachamama' - the ritual that thanks the earth for all that we receive from it," said Krip. "This ritual was performed at Mariana Lithium in September after successful approval of the Environmental Impact Report by the Salta regional government in Argentina and granted approvals for the construction of a plant with a designed annualized capacity of 20,000 tonnes per annum of lithium chloride."
Klip highlighted that the new mine plan represented a 100% increase of the previously planned lithium annual production rate presented in the preliminary economic assessment (PEA), announced in early 2019.
"It was the first PEA on the project and provided a potential value for the total NSR Royalty from Mariana's life of mine cashflow, which has now been very significantly increased. We welcome the news from the Salta regional government following its discussions with Ganfeng that the likely project expenditure to bring the Mariana project to full production is approximately US$600 million," he added.
"TNR does not have to contribute any capital for the development of Mariana and our NSR Royalty does not depend on the size of ILC's diluted ownership in the Mariana lithium project. The 1.8% Mariana NSR Royalty on the entire Mariana Lithium project is a very important part of TNR Gold's portfolio. The essence of our business model is to have industry leaders like Ganfeng Lithium as operators on the projects that will potentially generate royalty cashflows to contribute significant value for our shareholders."
TNR provides significant exposure to gold, copper, silver and lithium through its holdings in Alaska (the Shotgun Gold porphyry project) and Argentina (the Los Azules Copper and the Mariana Lithium projects) and is committed to the continued generation of in-demand projects.