Andrada Mining Limited (Andrada), a British transition metals producer, has forged a partnership with a Chilean firm for them to jointly develop a lithium project in Namibia.

The AIM- and OTCQB-traded Andrada said in a statement on September 9 that its deal with the lithium chemicals producer, Sociedad Química y Minera de Chile SA through its subsidiary SQM Australia (Pty) Ltd (SQM), will be a three-stage earn in agreement for the development of the Lithium Ridge asset in Namibia’s Erongo mining region.

The project lies adjacent to Andrada’s Uis tin mine.

A new wholly owned subsidiary of Uis Tin Mining Company Limited, Grace Simba Investments (Pty) Ltd (GSI), now holds the Lithium Ridge mining licence.

In terms of the deal, said Andrada in the release, SQM can earn into GSI by funding the exploration and a definitive feasibility study (DFS) at Lithium Ridge.

SQM has agreed to pay Andrada a $500,000 participation fee on signing and an additional $1.5mn upon satisfaction of set conditions.  It has an option to invest $20mn over three and a half years to earn a 40% ownership of GSI.  Funding of a DFS will see SQM owning up to 50% shares in GSI.

Andrada chief executive officer, Anthony Viljoen expressed happiness at partnering a major player in the global lithium industry to invest in its first African project.

“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,” he said.