Canadian mineral exploration and development company International Lithium Corp (ILC) has obtained an option to buy all shares of Lepidico Mauritius, a holding company for lithium and specialty metal assets in Namibia, from lithium and specialty metals company Lepidico Canada.

The agreed consideration is C$975 000, with additional contingent payments linked to potential future receipts by Lepidico Canada.

Lepidico Mauritius owns 80% of Lepidico Chemicals Namibia, which controls the Karibib lithium, rubidium and caesium project in Namibia. Should ILC exercise the option, the company would gain a near-term advanced project in Southern Africa, alongside its existing Raleigh Lake project in Ontario, Canada.

ILC has signed a secured loan agreement with Lepidico Canada for C$510 000. Of this, C$420 000 accrues interest at 10% a year. If ILC exercises the option, the loan and interest will be repaid from the option proceeds. To date, C$285 000 has already been advanced.

The option remains valid until the later of November 30, or 30 days after the outcome of ongoing arbitration involving Lepidico Namibia. Conditions for drawing the remaining C$225 000 include regulatory approvals and confirmation that Lepidico Mauritius and its subsidiaries hold no debts to Lepidico’s former parent group, which is in liquidation.

A key uncertainty is an arbitration in Singapore between Lepidico Namibia and Chinese company Jiangxi Jinhui Lithium, involving claims and counterclaims. A decision is expected later this month or in October. If the outcome is negative, ILC may choose not to exercise the option.

If the outcome is positive, 30% of any net proceeds after costs will stay within the Lepidico group entities that ILC would acquire, while 70% will go to Lepidico Canada. This arrangement reflects ILC’s decision not to assume liability for a dispute dating back seven years.

Parent company Lepidico acquired the Karibib project in 2019 through its takeover of Canadian-listed company Desert Lion Energy in a deal valued at C$20.7-million. Since then, Lepidico has invested an additional C$10.9-million in the project, covering drilling, environmental studies, a definitive feasibility study (DFS) and a resource estimate.

The project comprises two mining licence areas – Rubicon and Helikon – near the town of Karibib, in Namibia, along with an adjacent prospecting licence (EPL5439). A DFS was completed in May 2020, based on mineral resource and reserve estimates prepared under the Joint Ore Reserves Committee (Jorc) Code of 2012. A resource update was later announced in January 2023, with data current as of December 31, 2022.

ILC has stated it is treating the Karibib resource estimates as “historical information” under Canadian reporting standards. Although the estimates were prepared according to the Jorc Code of 2012, one of the most widely recognised reporting systems globally, ILC has not yet engaged a qualified person to verify or update the information.

If the option is exercised, ILC intends to review and validate the technical data before treating it as a current resource under Canadian rules. The company has noted that despite the DFS and resource estimates, there is no guarantee further work will confirm an economic mining case.

Published data, however, suggests Karibib may host one of Africa’s largest rubidium resources, with potential to rival projects in Zimbabwe and Zambia. The project also contains caesium resources, equivalent to about one year of global demand.

In comparison, Chinese-controlled Sinomine has historically been Africa’s largest caesium producer through its operations at the Bikita mine in Zimbabwe.

If confirmed, the acquisition would give ILC the largest disclosed rubidium resource in Africa and expand its global rubidium holdings, which already include the Raleigh Lake project in Canada. The company said that it sees the project as a way to accelerate development compared with its other early-stage interests in Africa.

“This potential acquisition marks a significant advancement for ILC globally, particularly in Southern Africa. With this single transaction for a project that reached the DFS stage under Jorc in 2020 and was upgraded in 2022, the company would leapfrog, by several years, the development stage of other projects we are interested in, including those in Zimbabwe.

“Assuming the transaction goes ahead with ILC exercising its option, ILC will be well-positioned for an upswing in the lithium market, as well as strengthening its stance as one of the leading global players in the rubidium market and a company with some of the most significant caesium interests of any non-Chinese company,” ILC chairperson John Wisbey said on September 10.