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Charger Metals has announced it has entered into a farm-in agreement with Rio Tinto Exploration (RTX) for its Lake Johnston lithium project in the Yilgarn region of Western Australia.

The company also announced it has simultaneously agreed to purchase Lithium Australia’s minority interest in the Lake Johnson project for $2 million.

With shareholder and third-party approvals, the acquisition will take Charger’s ownership of the project to 100 per cent.

“The Rio Tinto Exploration farm-in agreement is an excellent result for Charger and its shareholders and reaffirms our belief that the Lake Johnston project has potential to host a large-scale lithium deposit,” Charger managing director Aidan Platel said.

“The planned significant investment by RTX will allow thorough systematic exploration over all of the project tenure, with initial exploration focused on fast-tracking the Medcalf spodumene prospect as well as progressing the Mount Day and Mount Gordon lithium prospects.”

RTX is set to pay $500,000 and invest a further $1.2 million in Charger ahead of the farm-in. The major will also spend a minimum $3 million over the first 12 months.

“The Rio Tinto Exploration farm-in agreement will see them potentially spending up to $42.5 million to earn up to a 75 per cent interest in the Lake Johnston project,” Charger chair Adrian Griffin said.

“The largely unexplored Lake Johnston Greenstone belt now hosts multiple spodumene discoveries and with the recent focus and increasing exploration activity could evolve into a prominent lithium province.”