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Critical minerals developer Bass Metals has inked a binding term sheet to acquire Blackearth SA, which holds an option over the San Jorge lithium project, in Argentina.

Under the terms of the agreement, Bass Metals will issue 150-million shares in consideration for Blackearth, on completion of the transaction, and a further 100-million shares nine months after the grant of the necessary permits to allow exploration activities at San Jorge.

Bass will also pay A$1-million on cash on achieving an inferred mineral resource estimate of more than 250 000 t of lithium carbonate at San Jorge, and a further A$1-million on achieving a measured and indicated mineral resource of 200 000 t of lithium carbonate.

The San Jorge project consists of 15 granted exploration licences covering some 36 000 ha of land.

Under the option agreement over San Jorge, Blackearth will be required to pay $4.5-million to the vendor, and to spend $2.95-million on the project area to acquire full ownership.

Bass told shareholders on Friday that the San Jorge project was highly prospective, with the company planning an aggressive exploration programme for 2021, with a view to establish a resource over the project area.

“Bass has long held a view that both the lithium and graphite markets will be in deficit post 2025 and this deficit will drive up prices in both commodities,” said Bass chairperson Rick Anthon.

“We are delighted to execute this agreement over the San Jorge project as it has the potential to deliver significant value to the company’s shareholders. The San Jorge project is strongly complementary to the company’s existing graphite and lithium assets and positions Bass to become a wholly integrated producer of graphite and lithium delivering into the rapidly expanding global battery supply chain.”