A Chinese mining financier has taken an equity stake in a junior mining company exploring for cesium and lithium in northeastern Ontario.
Sinomine Rare Metals Resources is providing $3 million to Power Metals Corp. through a financing agreement that will see the Beijing-headquartered company hold a 5.7 per cent interest of the Vancouver and Arizona-based junior miner.
In a Dec. 21 news release from Power Metals, Sinomine is being hailed as their partner to develop the Case Lake Project, 80 kilometres east of Cochrane, close to the Ontario-Quebec border.
The 9,500-hectare property is still in the exploration stage — the company has been drilling there since 2017 — and does not have a published resource estimate.
Power Metals also signed an agreement toward negotiating an offtake agreement with Sinomine on all the lithium, cesium and tantalum produced from Power Metals' Case Lake property.
An offtake agreement is an arrangement between a mining company and a buyer. They're generally negotiated after a mine feasibility study is done and before mine construction.
Power Metals said in a Jan. 10 news release that it's applying for a permit from the provincial government to resume drilling at Case Lake. The financing from Sinomine is helping fund the program.
Johnathan More, Power Metals chairman, said they have drilled more than 13,000 metres at the project with this next program of 20,000 metres to follow up on a new discovery of cesium that's on the surface.
Power Metals maintains it has a rare "trifecta" of high-grade cesium, lithium and tantalum mineralization, sitting at surface. There are only three cesium mines in world; in Australia, Zimbabwe and the Tanco Mine in Manitoba. The latter is owned by Sinomine.
Listed on the Shenzhen Stock Exchange Market in China, Sinomine is out to secure and invest lithium, cesium and rubidium resources around the world, known as light rare earth elements. It owns two operating copper mines in Africa.
These two companies signed a letter of intent in September 2020 to finance and develop three properties of Power Metals' properties in Northern Ontario containing cesium, lithium and tantalum elements.
Besides Case Lake, Power Metals holds the Paterson Lake Project, north of Kenora and the Gullwing-Tot Lakes Project northeast of Dryden.
Lithium, cesium and tantalum are on Canada's list of 31 critical minerals considered vital in aerospace, defence, telecommunications, computing, and a number of clean technologies such as solar panels and electric car batteries.
"Sinomine is one of the largest producers of rare and light minerals products in the world and their partnership in developing our Case Lake Project will bring extensive value," said More in the December news release.
"In 2019, Beijing-based Sinomine Resource Group acquired the historic TANCO Lithium Mine in Manitoba giving our newly formed partnership a well-situated processing facility for our lithium, cesium and tantalum. Sinomine's investment in our company will fully and immediately be directed towards the advancement of Case Lake and their additional advisement at the board level is invaluable."
Sinomine Chairman-CEO Wang Pingwei called Power Metals "a promising mining company with great potential in lithium, cesium and tantalum resources. Sinomine will work closely with Power Metal to develop together to achieve win-win relations, and eventually to make major breakthroughs in the field of rare and light minerals."