Pan Global Resources is earning up to 80% into any 3 of 14 blocks of exploration licenses in the Balkans totaling >1000 km2 of in Serbia and another 250km2 in Bosnia In the vicinity of Rio Tinto’s Jadar Lithium and Borate deposit currently in PFS. PanGlobal's joint venture partner, Lithium LI holdings consists of former Rio Tinto executives considered Lithium / Borate specialists and were instrumental in the discovery of the Jadar deposit. The Joint Venture is targeting direct analogs of this deposit which consists of a JORC inferred resource of 114Mt @ 1.8 % Lithium and 13% Boron. Production is slated to commence in 2016. The project could supply up to 20% of current global lithium demand.
Deal structure :
On February 16, 2011 Pan Global Resources Inc. announced that it has signed a definitive option agreement with LithiumLi Holdings Inc. to earn up to 80% interest, in LithiumLi., a private company controlled by Mr. Petr Palkovsky. LithiumLi, through wholly-owned subsidiaries in the Balkans, has since been granted eight exploration licenses in the Republic of Serbia and has applied for an additional 4 licenses in Serbia and two in Bosnia and Herzegovina. Under the terms of the Option Agreement, 3 of these 14 exploration licenses and applications may be retained by Lithium Li, a decision that Pan Global shall determine, in its sole discretion,
To earn a 51% interest in LithiumLi, Pan Global must pay an aggregate of $500,000 in property payments, incur exploration expenditures on the exploration licences (both current and pending approval) of not less than $1,500,000 within 18 months of the date of the Option Agreement, incur exploration expenditures of not less than an additional $2,500,000 within three years of the date of the Option Agreement, and issue 375,000 common shares to the Optionor.
To earn an additional 14% interest and bring its interest in LithiumLi to 65%, Pan Global must incur exploration expenditures of not less than $8,000,000 within four years of the date of exercise of the initial 51% option, while to earn an additional 15% interest and bring its interest in LithiumLi to 80%, Pan Global must incur sufficient exploration expenditures for the completion of a feasibility study, or $20,000,000 in the aggregate, within ten years of the date of the Option Agreement. In addition, Pan Global will issue 250,000 common shares to the Optionor on exercise of the initial 51% option, and 250,000 common shares on each of the first and second anniversaries of the exercise of the initial 51% option.
Lithium Li will be in charge of operating the project until exercise of the third option, at which point Pan Global shall have the right to take over as operator. Current management of Lithium Li consists of Petr Palkovsky, Bob Kellie and John Reynolds.
By September 2011, reconnaissance mapping and sampling had started on all of 8 licenses approved by the Serbian authorities. These licenses cover an area totaling 643km2 and consist of Jadar West (87km2), Badanja (87km2), Valjevo (91km2), Ljig (98km2), Radusa (95km2), Kosjeric (96km2), Bela Crkva (33km2) and Gorobilje (55km2). Geochemical assays have been obtained from outcrops in the Valjevo license and indicate strong lithium and borate anomalism but assays from other geochemical sampling remains pending. Gravity geophysical surveys have been undertaken on the Jadar West, Valjevo, Ljig, Radusa and Badanja licenses and have been instrumental in defining basin geometry which is critical to the formation of Jadarite ( lithium borate), the target mineralization in this Balkan environment. Magneto-telluric geophysical surveys have also been completed on the Badanja, Jadar West and Valjevo licenses to help define zones of conductivity which may represent lithological units that preferentially host the Jadarite mineralization. The Badanja and Jadar West concessions are immediately adjacent to Rio Tinto’s Jadar deposit . Given the rapid advance of the multidisciplinary exploration program currently underway the company expects target reconnaissance drilling to be undertaken throughout Q3 and Q4 2011.
The first hole of a 4 hole initial diamond drilling program has now been completed in the Badanja exploration license with the second hole in the adjoining Jadar West tenement block now underway. Drill hole RAR-1 was completed to a bottom depth of 600.8m on 22 August 2011. While no visible Jadarite or borate mineralization was noted, the hole encountered over 315m of prospective, intercalated, lacustrine sediments comprised chiefly of marlstone, claystone, siltstone and sandstone that are in the process of being sampled for geochemical analyses. RAR-1 can be directly correlated to the Jadar deposit through the base of the gypsum transition unit, the basin’s principal marker horizon. RAR-1 has also confirmed the utility of Gravity and MT geophysics as attested by the thick cumulative section of drilled pelitic sediments and greatly enhances the probability that these rocks extend elsewhere on the Badanja and Jadar West licenses. After cutting, a ¼ split of drill core will be sent for multi-element ICP-OES analyses and any intervals containing >2000ppm Lithium and/or 10,000ppm Boron will be further analyzed by KOH fusion / ICP-OES for total B & Li contents. It is anticipated that at least some of these analyses will contain anomalously-high geochemical values that will provide additional correlation and targeting vectors.