Andrada Mining shares rose on Monday after announcing a strategic partnership with SQM, a major lithium chemicals producer, for the development of its Lithium Ridge asset in Namibia.
The agreement, subject to regulatory approval, involves a three-stage earn-in process. SQM will pay Andrada US$2 million initially and can invest up to US$20 million over 3.5 years to acquire a 40% stake in Grace Simba Investments, the subsidiary holding the mining licence.
Further funding of a Definitive Feasibility Study could increase SQM’s ownership to 50%. Andrada will manage the project during the earn-in period, with a joint development committee overseeing progress. The partnership aims to accelerate the asset’s development, potentially benefiting Andrada’s shareholders and Namibian stakeholders.
A success fee is also included, contingent on achieving a significant mineral resource estimation.
“We are incredibly pleased to announce our partnership with SQM, a global leader in the lithium industry and to be part of the first African partnership that SQM has entered,” said Anthony Viljoen, Chief Executive Officer.
“This partnership solidifies our belief in the Lithium Ridge asset as a potential world-class resource, and further establishes Andrada as a multi-asset, polymetallic explorer and miner. We believe this partnership also significantly enhances the value of our entire asset portfolio. Furthermore, partnering with SQM provides the ideal partner to unlock the full potential of Lithium Ridge, while allowing continuation of the development of Uis through our existing financing relationships.
“The SQM partnership aligns perfectly with our strategic objectives, enabling us to develop our neighbouring lithium asset, and to accelerate exploration initiatives. The terms of this agreement establish a long-term, value-creating relationship that incentivises operational milestones and delivers sustained returns for our shareholders. The introduction of a substantial player in the global lithium market will also place Namibia at the forefront of the African lithium development trajectory and unlock value for the Namibian mining industry.”
SQM is one of the world’s largest lithium mining companies, and its involvement in the project is a major validation of its quality.
Andrada Mining shares were 19% higher at 11.12 am Monday 9th September.